CONTENTS: Veidekke Holds a Leading Position in the Building, Heavy a Brief Look at the Divisions 2 Construction, Asphalt and Property Markets in Norway

CONTENTS: Veidekke holds a leading position in the building, heavy A Brief Look at the Divisions 2 construction, asphalt and property markets in Norway. An Attractive Company 4 The Board of Directors’ Report 6 Veidekke was founded in 1936 and has been listed on the Oslo Accounts for Group 14 Stock Exchange since 1986. Veidekke has always emphasised Accounts for Parent Company 26 Auditor’s Report 30 the importance of controlled growth and a strong focus on Key Figures 31 Shareholder policy 32 profitability through a flexible organisation with decentralised The Corporate Management 36 financial responsibility. Building 39 Heavy Construction 43

Asphalt 47 Property 51 Health, Safety, Environment 55 Organisation 59 Addresses 60

FIVE-YEAR REVIEW 1995 1994 1993 1992 1991 Turnover* 3,965 3,162 3,137 3,665 3,640 Profit before taxation* 78.4 5.2 75.2 81.2 74.7 Orders-on-hand excl. asphalt* 1,944 1,731 1,358 1,205 1,712 Equity ratio (%) 29.2 28.7 31.5 28.6 24.6 Earnings per share (NOK) 9.13 -1.25 8.84 8.70 7.74 Dividend per share (NOK) 3.00 2.00 2.75 2.25 2.25 Number of employees at 31 December 2,888 2,785 2,694 2,869 3,007

* NOK million For key figures and definitions, see page 31 Publication dates for interim reports in 1996:

1st quarter: 25 April 2nd quarter: 15 August 3rd quarter: 31 October

The Annual General Meeting will be held on 25 April 1996.

Front page Jørgen Sture, one of Veidekke’s apprentices Turnover Business philosophy NOK mill. 4,000 In partnership with its customers, Veidekke will supply 3,500 products and services to the building, heavy construc- 3,000 tion and asphalt markets and give its shareholders a 2,500 high, stable return on their investments over time. 2,000 We will achieve this by: 1,500 • choosing projects where Veidekke has an advantage 1,000

500 by virtue of its expertise

0 • long-term customer relations 1991 1992 1993 1994 1995 • creating values based on own employees Profit before taxation • cooperation with selected partners.

NOK million 90 Objectives 75 It is Veidekke’s aim to be the leading contractor in 60 Norway. From 1997 and onwards the company shall

45 achieve a profit margin in the range of five per cent. The absence rate shall be less than five per cent and the 30 injury rate shall be less than 12 per million working 15 hours.

0 1991 1992 1993 1994 1995 1995

Areas of activity 1995 After a weak year in 1994, Veidekke achieved a profit margin of two per cent in 1995. This is comparable with 1993. The price of Veidekke shares increased by 8.4 per cent in 1995.

«Five in ‘97 - Veidekke towards the year 2000» ■ Heavy Construction 29 % ■ Asphalt 20 % «Five in ‘97 - Veidekke towards the year 2000” is the ■ Property 2 % motto for a far-ranging improvement and development ■ Building 49 % process that has been initiated in the company. Priority is being given to four main areas: Management, customer relations, supply management and technical skills. A brief look at the divisions

Operations The divisions 1995 Highlights of 1995 Priority areas 1996 «Five in ‘97 - Veidekke towards Building The result of Veidekke’s building 1995 1994 • The Ski Shopping Centre opened in • Increasing the transfer of expertise and the year 2000» operations improved in 1995. Turnover 1,951.8 1,557.7 September. experience between the regions. • The Rica Arctic Hotel in Tromsø Continuing good market condi- Operating profit/loss 10.9 -3.9 • Focus on customer orientation and The company’s objective shall be 49% 43% tions and the effects of ongoing opened in November. supplier cooperation. internal measures are expected Profit before taxation 34.5 13.0 • Renovation work was started on a • Expanding production capacity and achieved by making improvements in its to provide the basis for a further, No. of employees 1,408 1,404 Housing Cooperative in Oslo, expertise in the housing market. four divisions through the strategic gradual improvement in profit contract value NOK 49 million. To this end, an agreement was made in margins. Orders-on-hand stood • Turnkey contract for the Amanda February 1996 to take over the development of management skills and at NOK 1,024 million at 31 Shopping Centre in Haugesund company Moderne Bygg A/S. Turnover Profit signed. basic values, customer relations, supply December. See also page 38-41 management and technical skills.

Management skills and basic Heavy construction Activity remained high in Heavy 1995 1994 • Work was commenced on the North • Improving profits by being more values Construction in 1995 with Turnover 1,172.0 950.9 Cape Tunnel. The tunnel has a length selective in choice of projects and Priority will be given to the development intense competition for contracts. Operating profit/loss 1.7 -40.1 of 6.9 km, and is the longest subsea niches were we have special expertise. 29% 4% Improvement measures imple- road tunnel in the world. • Increasing margin requirements. Profit before taxation 2.9 -35.0 of managerial behaviour and the exer- mented in 1994 continued in • Contract signed for the railway line • Focusing on the development of 1995, including giving priority No. of employees 810 743 from Arteid Bridge to Kverndalen in human resources and on organisati- cise of management skills. There will to bids, making better use of connection with Oslo’s new main onal development. also be careful selection in our choice of systems and routines, and airport. focusing on productivity- • In 1995, work totalling NOK 100 Turnover Profit projects and loyalty to profit margin promoting measures. During the million was carried out for the new See also page 42-45 year, orders-on-hand increased main airport at Gardermoen and the requirements. from NOK 577 million to NOK Armed Forces relocation at Rena. 920 million. Customer relations The results of a comprehensive Asphalt Surplus capacity combined with 1995 1994 • Contract for the pavement of the • Continued focus on special expertise the appearance of new compa- Turnover 812.2 686.9 east runway at Gardermoen signed. in the construction of rock-fill dams customer survey that was carried out in with asphalt cores and asphalt pave- nies in the asphalt market kept Operating profit 46.3 40.9 The work will be completed in 1995 will form the basis for our efforts to 20% 52% prices low. Crushed stone and 1998. ments of airports. gravel operations made a posi- Profit before taxation 42.4 35.7 • The Veidekke Group secured • Further development of cold mix improve customer satisfaction through tive contribution, with an No. of employees 605 514 contracts for asphalting work at technology, including microsurfacing increase in sales on both the five airports in Norway. and stabilisation with bitumen by an improved professional and business- domestic and the export • Investment made in a new «super- milling. like approach. markets. Orders-on-hand stood mobile» asphalt plant, an Astec • Continued moderate growth in the Turnover Profit at NOK 125 million at the end Double Barrel. crushed stone and gravel segment. of the year. • Continued rationalisation and See also page 46-49 improved utilisation of machinery. Supply management By utilising size, financial strength, reputation and contacts, we will work Veidekke owns property with 1995 1994 • Work started on the Norwegian • Utilising Veidekke’s business contacts to reduce the total costs of purchasing Property total floor space of about 91,000 Turnover 63.5 49.6 Textiles and Fashion Centre in and expertise in property manage- Oslo. This building has a total square metres. Revenues from Operating profit 20.3 22.9 ment and development. and materials handling. 2% 1% rent amounted to NOK 55.8 floor space of 23,000 square • Improving customer service and million, of which NOK 43.0 Profit before taxation 0.8 2.6 metres. More than 50 % of the market contact. million were external revenues. income was secured before • Releasing capital by selling properties Technical skills Total book value of properties construction started. Veidekke has a and reinvesting in new development for external rent was NOK 42.5 % share in this project. projects. We have intensified the work we are 302.9 million. In addition to this • The property at Fornebuveien • Maintaining a high occupancy rate. Turnover Profit 11-13 at Lysaker was sold. doing on building up expertise, transfer- are properties for own use total- See also page 50-53 ling NOK 86.7 million. ring experience and recruiting.

2 3 An attractive company

Veidekke embarked on 1995 with favourable prospects in most of its markets. The Norwegian economy showed a positive trend throughout the year; the interest rate and inflation rate remained low, there was an improvement in take-home pay, and the earnings in industry were good. However, competition in the building and construction industry remained fierce throughout the year. After a year of low earnings, we had set ourselves the target of getting profitability «back on track» in 1995. Our result for the year and the content of our strategy «Five in ‘97 - Veidekke towards the year 2000» both show clearly that we are on the right track.

1995 - a turning point 1995 has been a turning point for Veidekke. The housing market fell Terje R. Venold slightly in 1995, but the heavy construction market, the commercial property market and the asphalt market all showed an upswing in 1995. We are aware, however, that growth in the building and construction markets will level out gradually, before sloping down- wards in 1997. We are also meeting new competitors with international experience on the building and construction markets. The Nordic countries seem to be regarded more and more as a single market. We will have to approach this new market and competitive situation actively, if we wish to be the leading contractors in Norway. We will have to refine our competitive advantages into profitable concepts through continuous technological development. The strategy we have formulated under the motto «Five in ‘97» is one answer to the challenges we are facing.

«Five in ‘97» is also an improvement process Our corporate vision is to continue developing Veidekke so that it will remain a company which gives its owners a good return on their capital, a company which is attractive and enjoys the confidence of its customers, and a company in which its employees can develop and thrive. It is our aim to be the leading contractor in Norway, in terms of expertise and in terms of financial strength. Starting in 1997, the company aims to achieve a profit margin in the range of 5 %. Setting the target this high is a quantum leap, but it is an attainable target. It is important for the company to reach this milestone which will enable us to develop as an independent, innovative and thriving company.

«Five in ‘97» is also our strategy for how we are going to meet this target. Improvements will be made in four important areas: Management skills, customer relations, supply management and technical skills. Veidekke has able managers at all levels today, but there is still room for improvement. However, there is a great need for

4 improvement in our relations with our customers and with this in mind, «Five in ‘97 - Veidekke we carried out a survey among 800 of our customers. This survey gave us some useful pointers as to where to take action to improve ourselves. towards the year 2000» Supply management is another area where we must invest heavily, and we admit that there is plenty of room for improvement also here. is both a goal and a process. Improvements in Profitable business development Profitable business development is the main objective of our R&D work the fields of management, and is an important part of building up our expertise. It is important for Veidekke to be a power behind the development of the building and supply management, construction industry. We will achieve a competitive edge from customer-adapted concepts, rational production systems, special techno- technical skills and logical expertise and skilled workers. We realise that business development is a process that will have to go on continuously in our company customer relations will if we are to achieve our long-range objective of profitability. Our greatest challenge is to give priority to and direct our efforts in the right help to cement Veidekke’s fields. Herein lies the admission that there are some fields where we are not best, and should possibly be excluded from our portfolio. position as leading

An interesting future construction company. In light of the market and operating conditions and the strategy that we at Veidekke have chosen, we can face the future with enthusiasm and optimism. While wishing to be the leading company in the construction business, Veidekke is also aware of its obligation to contribute to the structural development of the industry in general. In order to bring about structural changes, we have to have competent owners who set demands regarding return on capital and profitability. In this way, good profitability is also Veidekke’s social and economic contribution.

Terje R. Venold President and CEO

5 The Board of Directors’ Report

Profits up in all divisions. Main features The building and construction market showed an upward trend throughout Orders-on-hand are good. 1995 and a growth of 10 % compared with the year before. Growth was most noticeable in commercial building, where activity increased by 27 %, while the Market prospects are number of new dwellings commenced levelled out during the year and ended up with a total of approximately 20,000. Although the demand in the market was good. high in 1995, there was also intense competition for the contracts. This applied particularly to the heavy construction market, where it resulted in pressure on prices.

Veidekke’s turnover for 1995 was NOK 3,965 million (NOK 3,162 million), giving a profit before taxation of NOK 78.4 million (NOK 5.2 million). Turnover and profits rose in all of Veidekke’s business areas. Heavy Construction showed a substantial improvement following the losses in 1994 and achieved a profit for the year of NOK 2.9 million (NOK -35.0 million). The Building Division posted a profit of NOK 34.5 million (NOK 13.0 million), while the profit for Asphalt was NOK 42.4 million (NOK 35.7 million).

After a relatively strong growth during the first half of the year, orders-on-hand Turnover (excluding Asphalt) maintained the same level in the second half of the year to NOK mill. 4,000 stand at NOK 1,944 million (NOK 1,731 million) at 31 December.

3,500 After minority interests and tax expenses, earnings per share were NOK 9.13 3,000 (NOK -1.25). 2,500

2,000 Building

1,500 The total building market (commercial and residential) increased by about 17 % in 1995. Much of this growth can be ascribed to major ongoing public building 1,000 projects. Like the previous year, the growth was greatest in Oslo and Akershus. 500 The steep upswing in building costs in 1994, resulting from the increase in prices

0 1991 1992 1993 1994 1995 of material and subcontracting services, was less marked in 1995. The average growth in building costs for Norway as a whole was comparable with the consumer price index at the end of 1995. In some parts of eastern Norway, the Profit before taxation rise in the prices of input factors was higher than the national average. NOK mill. 90 In 1995, the Building Division achieved a turnover of NOK 1,952 million (NOK 75 1,558 million). The increase in turnover compared with 1994 is largely a reflec-

60 tion of the high volume of orders-on-hand at the start of the year. Much of the growth in turnover was a result of the building of shopping centres with exten- 45 sive use of subcontracts. In view of the fact that the building market may be about to culminate, Veidekke has taken care not to build up capacity to any 30 great extent. The number of employees in the Building Division was 1,408

15 which is at the same level as the year before (1,404).

0 1991 1992 1993 1994 1995 Profits for the Building Division showed a positive trend in 1995 and gave a profit for the year of NOK 34.5 million (NOK 13.0 million). Continuing good

6 market conditions and the effects of ongoing internal improvements are The Board of Directors of Veidekke ASA. expected to provide the basis for a further, gradual improvement in margins. Left to right: Steinar Krogstad and Kåre

There were only minor changes in orders-on-hand in 1995, giving a figure of Strand, who represent the employees, NOK 1,024 million (NOK 1,154 million) at 31 December. Håkon Langballe, Arve Johnsen, Flemming

Vejgaard Andersen, Helge B. Andresen, At the end of the year, the Division’s project portfolio included several contracts that were based on direct negotiations with the clients. These contracts are based Karsten Houm and Chairman of the Board on mutual trust and previous contracts that were completed to the client’s satis- Christian Bruusgaard. faction. Veidekke’s largest ongoing projects are two shopping centres for Steen & Strøm Invest; Vinterbro Centre, which is due for completion in March 1996, and Amanda Shopping Centre in Haugesund. Another contract, a centre for textiles and fashion, «Norsk Bransjesenter», at Skøyen in Oslo, is described in more detail under “Property”. During 1995, Veidekke completed the Arctic Hotel («Ishavshotellet») in Tromsø for Rica Hotels and the Ski Shopping Centre for Olav Thon Eiendom.

During the year under review, Veidekke commenced the building of 101 dwellings for its own account (258). The number of unsold dwellings at the end of the year was 33 (39). The decrease in building for Veidekke’s own account ties up with the generally higher level of activity and allocation of resources for commercial building and dwellings for external clients.

Veidekke signed an agreement of intention in February 1996 to purchase Moderne Bygg A/S. This is part of the company’s strategy to reinforce its

7 Areas of activity 1995 capacity and expertise in housebuilding in the Oslo area. The acquisition of Moderne Bygg A/S will increase Veidekke’s possibility of undertaking more and larger contracts in the field of development, production and sales. A clarification is expected by the end of April.

The activities of Veidekke’s German subsidiary, Veidekke GmbH, were mainly concentrated on the construction of petrol stations for Statoil. Turnover from ■ Heavy Construction 29 % building activity in Germany amounted to NOK 85 million (NOK 70 million). ■ Asphalt 20 % ■ Property 2 % Heavy construction ■ Building 49 % The heavy construction market maintained the same high level of activity in 1995. However, competition is still fierce and international contractors are active in the market, particularly in the east of Norway. Orders-on-hand

NOK mill. 2,000 The Heavy Construction Division showed a turnover of NOK 1,172 million in 1,800 1995 (NOK 951 million). This increase is a reflection of certain major contracts 1,600 that Veidekke was awarded at the beginning of the year, for example in connec- 1,400 tion with the Gardermo development and the road tunnel connecting the island 1,200 of Magerøya in Finnmark with the mainland. Moreover, an increased ownership 1,000 share of A/S Noremco Construction contributed NOK 104 million to the 800 growth in turnover. There has been no noticeable build-up in capacity in Heavy 600 Construction. At the end of the year, the number of employees was 810 (743), 400 including the monthly paid employees of Noremco. 200

0 1991 1992 1993 1994 1995 The profit for the Heavy Construction Division was NOK 2.9 million (NOK -35.0 million). The rise in profits was due to a continuation of the improvements that were initiated in 1994. These include strict prioritising of bids, better use of the company’s systems and routines, and cost-cutting measures. A project involving all categories of employees has played a vital part in these improvements. This project is supported by the Norwegian Federation of Trade Unions and the Confederation of Norwegian Business and Industry under their joint business development programme.

Turnover from international operations stood for about 25 % of the Division’s turnover last year. Included here is Noremco Construction, which is engaged in contracting operations in Tanzania and Zambia. Noremco had a turnover last year of NOK 171 million (NOK 134 million). Veidekke owned 47.5 % of Noremco in 1994 and took over the remaining shares in the company on 1 January 1995.

The company Norwegian Construction Group, Nocon AS, which is owned equally by Veidekke and Selmer, achieved a turnover last year of NOK 156 million (NOK 105 million). Orders-on-hand stood at NOK 195 million at the end of the year. Nocon’s largest contracts are the construction of a quay in Thailand and a tunnel in Northern Italy in connection with a water supply project. Veidekke also participates along with Selmer and Norconsult

8 International in the Advisory Group of Norway (AGN), which has been engaged in consultancy projects relating to hydropower development in China since 1983. Veidekke has also been engaged in a major construction project in Sweden.

The prospects for 1996 indicate that the high level of activity in the heavy construction market will continue. This, combined with continued improvements, will provide the basis for further improvements in profits. At the end of the year, orders-on-hand stood at NOK 920 million (NOK 577 million).

Asphalt operations Veidekke’s asphalt operations showed a turnover in 1995 of NOK 812 million (NOK 687 million), giving a profit of NOK 42.4 million (NOK 35.7 million). These figures include Korsbrekke og Lorck AS, a subsidiary in which Veidekke owns 60 % of the shares.

The asphalt market developed largely as expected in 1995, with a somewhat higher volume than the year before. However, surplus capacity and the establish- ment of new companies in the market led to continued pressure on market prices. Veidekke’s Asphalt Division still managed to achieve a better result than the year before and this can be ascribed primarily to improvements in operating efficiency, cuts in costs and gains on sales.

Orders-on-hand stood at NOK 125 million at the end of the year, including options the figure is NOK 200 million. Orders-on-hand include the pavement contract for the east runway at Gardermoen, the building of asphalt cores for Statkraft Anlegg A/S at Svartisen and an asphalting contract for Sola Airport. These orders-on-hand thus provide a good starting point for operations in 1996.

Crushed stone and gravel operations progressed well; sales increased on both the domestic and the export markets. Veidekke had a total production of crushed stone and gravel materials of 3.3 million tons in 1995 and is thus one of the leading operators in Norway. The accessibility of high quality raw materials from its own quarries gives Veidekke a vital competitive edge on other asphalt contractors.

In January 1996, an agreement was signed whereby Veidekke will buy 100 % of the shares in Molde Asfalt A/S. This acquisition will help Veidekke to reinforce its market position in the Romsdal region.

Property At the end of 1995, Veidekke owned property totalling approximately 91,000 square metres. The occupancy rate for externally let properties was 98 % meas- ured in rental value.

9 Number of employees Total rental revenues were NOK 55.8 million, of which NOK 43.0 million 3,500 derived from external tenants. The Property Division showed a profit for the

3,000 year of NOK 0.8 million (NOK 2.6 million). Included in the result are interest and project costs charged to projects under preparation, totalling NOK 6.9 2,500 million.

2,000 Veidekke’s largest development project for its own account is located at Skøyen 1,500 in Oslo, where Veidekke and partners plan to erect five buildings with a total 1,000 floor space of 55,000 square metres. The first phase, Norsk Bransjesenter, a

500 textiles and fashion centre totalling about 23,000 square metres, was started in November 1995 and will be finished in March 1997. Veidekke’s share of this 0 1991 1992 1993 1994 1995 project is 42.5 %. The project is being carried out by Veidekke on a turnkey basis. One of the other buildings has been let to Scandic Hotel A/S and one is earmarked for use as a future head office for Veidekke. Equity Ratio

% 35 The market for rented business property in the Oslo area was stable in 1995. There is still a demand for good, functional premises in central locations. At the 30 same time, there is a good deal of newbuilding going on, which is keeping the 25 rent level down. Building costs in the Oslo area have risen faster than the infla-

20 tion rate and there are indications that this will continue in 1996, although no overheating of the market is expected, as was the case at the end of the eighties. 15 The low rate of interest helps to compensate for this. All in all, this meant that

10 conditions for commercial property developers remained virtually unchanged in 1995. 5

0 1991 1992 1993 1994 1995 Veidekke will utilise the company’s expertise and network of contacts in developing property to finished project. However, it is not advisable to increase tied- up capital over time, although there will be variations depending on the scope of projects under development, and the company will therefore always endeavour to sell completed projects. In January 1996, Veidekke sold an office building at Fornebuveien 11-13 at Lysaker and will continue to sell other properties.

Organisation and personnel At the end of the year Veidekke’s employees numbered 2,888 (2,785). Of these, 960 (902) were paid on a monthly basis, while 1,928 (1,883) were paid by the hour.

Organisational development and training within the company reflected Veidekke’s development process «Five in ‘97 - Veidekke towards the year 2000». This involves various measures within four core areas of expertise: Management, customer relations, supply management and technical skills. The development process is based on the participation of all groups of employees and close cooperation with the employees’ representatives. The company continued to enjoy positive relations with the union representatives for hourly and monthly-paid employees in 1995, both in formal contexts and during less formal discussions and day-to-day contact.

10 Veidekke maintained its high level of apprentices in 1995. The number of apprentices at the end of the year was 107 (92).

Absence among hourly-paid employees averaged 5.4 % in 1995 (4.6 %). Direct costs to the company for absence of all employees amounted to NOK 9 million (NOK 7.1 million). The injury rate per million working hours was 19.9 (18.7). Health, environment and safety work is defined as a managerial responsibility, and a number of steps have been taken to reverse the unfavourable trend. Veidekke is aiming for an absence rate of 5 % at a maximum from 1997 onwards and an injury rate of less than 12 per million working hours.

In order to protect the environment, asphalt, crushed stone and gravel operations are subject to special regulations issued by the National Pollution Control Authority and by municipal bodies. Veidekke emphasises the importance of conforming with the requirements and guidelines drawn up by public bodies and works actively to achieve further improvements. Constant attention is paid to the environmental consequences of the company’s other activities.

Financial situation Gross investments in machinery and equipment totalled NOK 166 million in 1995 (NOK 87 million). The largest investments were made in the Asphalt Division and totalled NOK 76 million. NOK 25 million was invested in buildings and sites (NOK 73 million). Sales of fixed assets amounted to NOK 67 million (NOK 46 million).

Cash flow from operations amounted to NOK 314 million. There was an increase in working capital, as expected, and this ties up with the company’s higher level of activity. At the end of the year, the Group’s total assets stood at NOK 2,059 million (NOK 1,923 million).

Total shareholders’ equity rose from NOK 552 million to NOK 600 million, giving an equity ratio of 29.2 % (28.7 %).

The Group’s net interest-bearing debt stood at NOK 11 million at the end of 1994, but was turned into assets by 31 December 1995 (NOK +105 million). This improvement can be ascribed to positive cash flow from operations.

At the end of the year, liquid assets amounted to NOK 388 million (NOK 372 million). In addition, the company has unused credit facilities of NOK 372 million (NOK 350 million) of a total limit of NOK 372 million (NOK 430 million). Veidekke has signed a five-year loan agreement giving sufficient credit facilities to ensure the company financial freedom of action. Veidekke has also raised funds on the short-term bond market at competitive terms. Five short- term bonds were issued in 1995, for a total of NOK 250 million.

11 Liquidity Shareholders and the stock market NOK mill. Veidekke wants a broad employee involvement and aims to make annual offers 500 of shares to its employees. In line with this objective, Veidekke made a private offer of shares to its employees in the autumn of 1995. Each employee was given 400 the opportunity to purchase between 10 and 200 shares at 20 % off the market price. A total of 574 employees subscribed for shares. Of these, 228 were new 300 shareholders. The offer of a total of 75,000 shares was fully subscribed and the employees now hold about 10 % of the shares in Veidekke. Shares were also 200 offered to employees in 1990, 1993 and 1994.

100 At 31 December, Veidekke had 2,245 shareholders (1,998). The company’s two

0 largest shareholders are Folketrygdfondet with 11.1 % and Avansefondene with 1991 1992 1993 1994 1995 8.5 % of the shares. 13 % of the shares were held by foreign investors at the end of the year (20 %).

A total of 4.1 million Veidekke shares were traded on the Oslo Stock Exchange in 1995 (2.7 million).

Prospects The Norwegian economy is showing healthy progress in most areas and there are good prospects that these favourable developments will continue in the future. In the short term, growth will be relatively strong in both consumption and real investment, but a gradual decline is expected in the long term. The interest rate remained low throughout 1995 in spite of some turbulence on certain foreign exchange markets. The low interest rate is expected to continue in 1996, with the possibility of a slight increase at the end of the year.

Against this background, we anticipate continued growth in the building and construction markets in 1996. However, there is reason to expect a lower growth rate than in 1995. The number of new dwellings commenced will remain about the same as in 1995. The level of activity in non-residential building is expected to be high in 1996, but the number of new projects will probably remain the same. Heavy construction activity will increase slightly in 1996. The development at Gardermoen and investment in roads and railways are major contributory factors here. Preliminary analyses indicate a slight decline in 1997. This will mean new challenges for Veidekke in choosing the most profitable markets and recruiting the best employees.

Veidekke’s figures for 1995 showed an upward trend in all of its business areas. On the whole, these figures answer to the targets set for the year, which included a return to the company’s level of earnings before the setback in 1994. Under the motto «Five in ‘97 - Veidekke towards the year 2000», a wide-ranging improvement and development process was initiated in 1995. This process will be continued and is expected to lead to a further increase in profit in 1996.

12 Application of Veidekke ASA’s profit for the year Veidekke ASA’s profit after taxation is NOK 38.6 million. The Board of Directors will propose to the General Meeting on 25 April 1996 that this be applied as follows:

NOK million Group contribution 2.0 Dividend 17.1 Legal reserve 11.0 Restricted revenue reserve -9.5 Distributable reserve 18.0 Total 38.6

Billingstad, 26 February 1996

Christian Bruusgaard Chairman of the Board

Flemming Vejgaard Andersen Helge B. Andresen Karsten Houm

Arve Johnsen Steinar Krogstad Håkon Langballe Kåre Strand

Terje R. Venold President and CEO

13 Profit and loss account

GROUP (Figures in NOK million) Note 1995 1994 1993

TURNOVER 1, 2, 23 3,964.7 3,161.5 3,137.0

Subcontractors -1,629.2 -1,166.7 -1,206.0 Cost of materials -1,064.4 -862.2 -793.2 Wages and social costs 17 -847.4 -748.6 -775.1 Other operating expenses -240.7 -277.5 -188.1 Deprecation 11 -107.1 -95.3 -110.5 Bad debts -3.6 -3.4 -0.2

Total operating costs -3,892.4 -3,153.7 -3,073.1

OPERATING PROFIT 72.3 7.8 63.9

Net financial items 3 1.5 -6.9 -3.4 Share of profit limited partnerships, ships 3.3 10.2 9.2 Share of profit/loss associated companies 9 1.3 -5.9 5.5

PROFIT BEFORE TAXATION 1 78.4 5.2 75.2

Taxation 18 -20.5 -6.0 -20.5 Minority interests 19 -7.2 -6.1 -6.4

PROFIT/LOSS FOR THE YEAR 50.7 -6.9 48.3

Earnings per share (NOK) 9.13 -1.25 8.84

14 Balance sheet

GROUP (Figures in NOK million) ASSETS AT 31 DECEMBER Note 1995 1994

Liquid assets 4 388.1 371.6 Debtors 5 543.2 455.4 Other short-term receivables 21.3 27.6 Stocks 6 86.5 44.7 Development projects for sale 7 47.9 110.9

TOTAL CURRENT ASSETS 1,087.0 1,010.2

Share in associated companies 9 35.3 23.3 Long-term receivables etc. 10, 17, 18 116.2 105.5 Goodwill 11 12.2 16.8 Machinery etc. 11 286.8 228.2 Buildings 11 388.9 402.7 Land 11 132.5 136.0

TOTAL FIXED ASSETS 971.9 912.5

TOTAL ASSETS 2,058.9 1,922.7

LIABILITIES AND SHAREHOLDERS’ EQUITY AT 31 DECEMBER

Debts to credit-issuing institutions 12 6.7 85.8 Creditors etc. 13 776.6 551.4 Unpaid government charges etc. 14 154.9 162.9 Other short-term debts 15 148.7 120.0

TOTAL CURRENT LIABILITIES 1,086.9 920.1

Long-term liabilities 16, 17 320.1 403.5 Deferred tax 18 51.7 46.8

TOTAL LONG-TERM LIABILITIES 371.8 450.3

MINORITY INTERESTS 19 54.9 50.1

Share capital 20 57.0 56.2 Other shareholders’ equity 488.3 446.0

TOTAL SHAREHOLDERS’ EQUITY 21 545.3 502.2

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 2,058.9 1,922.7

Secured liabilities 22 255.3 283.7 Guarantees 22 28.0 142.4

15 Statement of cash flows

GROUP

(Figures in NOK million) 1995 1994

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 78.4 5.2 Depreciation 107.1 95.3 Gain/loss on sale of fixed assets and shares in partnerships -35.8 -14.0 Tax paid -41.5 -15.4 Share of profit/loss associated companies -1.3 5.9 Share of profit limited partnerships, ships -3.3 -10.2 Net change in receivables, stocks, development projects for sale -60.3 -56.0 Net change in current liabilities excluding short-term borrowing, dividends and tax payable 270.7 24.9 Net cash from operating activities (A) 314.0 35.7

CASH FLOWS FROM INVESTMENT ACTIVITIES

Purchase of property, plant and equipment -192.9 -167.1 Proceeds from sale of property, plant and equipment 67.3 45.7 Proceeds from sale of shares in partnerships 17.6 0.0 Other investments (net) -21.4 34.8 Net cash from investment activities (B) -129.4 -86.6

CASH FLOWS FROM FINANCING ACTIVITIES

New long-term borrowing 19.3 89.0 Repayments long-term debts -102.7 -66.4 Change in short-term borrowing -79.1 38.7 New issue 8.0 0.0 Sale of own shares 0.0 12.7 Dividend paid -15.1 -17.2 Conversion differencies 1.5 -0.8 Net cash from financing activities -168.1 56.0

NET INCREASE IN LIQUID ASSETS (A+B+C) 16.5 5.1

Liquid assets at 1 January 371.6 366.5 Liquid assets at 31 December 388.1 371.6

16 Accounting policies

CONSOLIDATION Subsidiaries Subsidiaries are companies in which Veidekke has a direct or indirect majority of the votes. The subsidiaries’ profit and loss accounts and balance sheets are included in their entirety in the Consolidated Accounts. The minority interests’ share of the profit for the year (after taxation) and shareholders’ equity are shown as separate items in the accounts.

Shares purchased in subsidiaries are dealt with according to the purchase value method of accounting, by which the cost price of the shares is set off against the book value of the shareholders’ equity in the subsidiary at the time of purchase. Any added or reduced value is shared among the assets to which it relates. Non-assignable added value is entered as goodwill. Added value and goodwill are depreciated via the Profit and Loss Account.

Associated companies Associated companies are companies in which the Group owns long-term, strategic interests of between 20 and 50 % and where these interests allow the Group considerable influence on operating and financial decisions. In the Consolidated Accounts these companies are included according to the equity method. The equity method means that the share of the profit or loss after taxation, with an adjustment for depreciation of any added or reduced value (including goodwill) at the time of purchase, is included on a separate line in the Profit and Loss Account. In the Balance Sheet, this share is entered at cost price, adjusted in relation to the share of the profit or loss, dividend and adjustments of shareholders’ equity subsequent to the time of purchase.

Joint Ventures, Partnerships and Limited Partnerships Veidekke is involved with other contractors in a number of major contracts. The participants in these joint ventures are jointly and severally responsible to the clients. In the fields of property management and asphalt, Veidekke participates in several partnerships and limited partnerships. Since participation is within Veidekke’s main business areas and control is exercised jointly, these shares are entered in the accounts according to the gross method (proportional consolidation), whereby the share is integrated in each item in the Profit and Loss Account and Balance Sheet.

Limited partnerships - ships Veidekke is also a partner in limited partnerships which own ships. These partnerships are integrated in the accounts by the equity method. The share of profit or loss is shown as a separate item after financial items in the Profit and Loss Account and in the Balance Sheet these shares are classified as fixed assets.

Conversion of foreign companies Balance Sheet items relating to foreign companies are converted at the exchange rate applying on the date of the Balance Sheet, while Profit and Loss Account items are converted at average exchange rates for the year. The conversion differences for foreign subsidiaries are entered against the Group’s shareholders’ equity, while the conversion differences for foreign partnerships and joint ventures are entered in the Profit and Loss Account.

Inter-company transactions Receivables and payables between parent company and subsidiaries have been eliminated. The same applies to receivables and payables relating to joint ventures, partnerships and limited partnerships. Inter-company turnover and inter-company gains have also been eliminated.

17 Mergers The Group uses the continuity method to integrate companies. By this method, the integrated company’s assets and liabilities are carried forward at book value. Shareholders’ equity is altered by the integrated company’s shareholders’ equity, less the cost price of shares that the Group held prior to the merger.

Own shares The Group holds some of its own shares, acquired through take-overs. The cost price is entered as a reduction of shareholders’ equity. Any gain or loss on sales is booked directly against shareholders’ equity.

RECORDING INCOME Projects Veidekke operates mainly as contractors on projects which last from a few months to two or three years. Invoicing is done monthly (payment net 30 days) and usually as the contract activity progresses. However, other payment plans are sometimes used.

For projects, income is entered as the work progresses and in proportion to the percentage of completion. This means that the accumulated proportion of the estimated profit on the project is taken to income. The percentage of completion is determined on the basis of completed production.

In the case of projects that are expected to show a loss, the estimated loss is entered in its entirety as a cost. Provisions are made for guarantee work and other uncertainties. The guarantee period varies from one to three years. Disputed claims are entered as income once they have been settled or the outcome is certain.

Development projects for sale Development projects for sale are mainly concerned with house-building for Veidekke’s own account for sale. These projects are taken to income with prudence, in step with the sale and completion of the dwellings, based on the anticipated final profit for the project. Allocations are made for uncertainty, guarantee work, etc. In the case of projects that are expected to give a loss, the whole anticipated loss is expensed. Costs incurred on units not entered as income and development sites are entered in the Balance Sheet under «Development projects for sale». Development projects for Veidekke’s own account are valued at production cost or anticipated net sales value, whichever is lower. Production cost includes all assignable project costs. Projects for own account that are taken to income, but not paid, are classified as receivables and entered under «Debtors» (completed, not invoiced).

Development projects for Veidekke’s ownership Development projects for letting or own use are taken to income as capital assets at production cost including interest paid during the building period. Development projects for Veidekke’s ownership are entered as turnover.

Sales of fixed assets Gains on sales of machinery, buildings and other fixed assets are entered as turnover.

OTHER ACCOUNTING POLICIES Pensions Veidekke has a group pension scheme for its employees that is covered in a life assurance company. The employees’ pension rights are charged to expenses as they are earned and net pension commitments/pension funds are entered in the Balance Sheet. An actuarial calculation is made annually of pension expenses and pension commitments, taking into

18 account anticipated wage growth based on linear accumulation. «Pension funds» includes premium funds and Veidekke’s share of the insurance company’s funds (premium reserves). «Pension expenses» includes the present value of the year’s pension earnings plus interest on commitments less return on pension funds.

Tax This year’s tax expense consists of payable tax and the change in deferred tax. Payable tax is fixed on the basis of the year’s taxable profit. Deferred tax is a provision for future payable tax, calculated on timing differences between accounting and tax. The reason why timing differences arise is that some of the items in the Profit and Loss Account are treated differently for accounting purposes and for tax purposes. Deferred tax is calculated in nominal amounts, i.e. with no discount. There are moreover strict criteria for entering deferred tax benefits in the accounts.

Depreciation Depreciation is based on the financial lifetime of the fixed assets.

Research and development costs Costs relating to research and development of technology are charged to expense.

Receivables and debts Receivables and debts that relate to production are classified as current assets and short- term liabilities. Other receivables and debts which are not due for more than a year are classified as fixed assets and long-term liabilities.

Receivables are entered in the Balance Sheet at their nominal value less provision for bad debts.

Current assets and short-term liabilities in foreign currency are converted at the exchange rate on the date of the Balance Sheet. Long-term receivables in foreign currency are entered at the rate of exchange on the date of the Balance Sheet or on the date of acquisition, whichever is lower. Long-term liabilities in foreign currency are entered at the rate of exchange on the date of the Balance Sheet or on the date of acquisition, whichever is higher.

Stocks Stocks are assessed at full cost price or net realisable value, whichever is lower.

Shares Financial investments are classified as current assets, while strategic investments are classified as fixed assets. Short-term shareholdings are assessed on the portfolio principle.

Certain reclassifications have been made in the Balance Sheet in the Annual Account for 1995 and the figures for 1994 have been altered accordingly.

19 Notes to the accounts

GROUP (Figures in the tables in NOK million)

1 SEGMENTAL ANALYSIS

PROFIT AND Building Heavy constr. Asphalt Property Other act.t. Group LOSS ACCOUNT 1995 1994 1995 1994 1995 1994 1995 1994 1995 1994 1995 1994 Turnover 1,951.8 1,557.7 1,172.0 950.9 812.2 686.9 63.5 49.6 -34.8 -83.6 3,964.7 3,161.5 Operating costs -1,927.0 -1,543.6 -1,138.6 -970.3 -717.4 -599.3 -30.2 -16.8 27.9 71.6 -3,785.3 -3,058.4 Deprecation -13.9 -18.0 -31.7 -20.7 -48.5 -46.7 -13.0 -9.9 - - -107.1 -95.3 Operating profit/loss 10.9 -3.9 1.7 -40.1 46.3 40.9 20.3 22.9 -6.9 -12.0 72.3 7.8 Profit/loss ass. comp. ------1.3 -5.9 1.3 -5.9 Net financial items 23.6 16.9 1.2 5.1 -3.9 -5.2 -19.5 -20.3 3.46.8 4.8 3.3 Profit before taxation 34.5 13.0 2.9 -35.042.4 35.7 0.82.6 -2.2 -11.1 78.4 5.2

BALANCE SHEET Liquid assets 385.8 348.8 128.8 121.1 -23.212.1 -103.3 -110.4 - - 388.1 371.6 Other current assets 385.5 333.3 223.6 179.7 84.774.9 5.150.7 - - 698.9 638.6 Fixed assets 109.2 116.3 116.0 63.2 236.2 219.8 510.5 513.2 - - 971.9 912.5 Total assets 880.5 798.4 468.4 364.0 297.7 306.8 412.3 453.5 --2,058.9 1,922.7 Interest-bearing debt 35.4 79.0 24.0 40.2 16.445.7 222.9 285.0 - - 298.7 449.9 Other liabilities 685.3 551.1 320.5 229.9 128.4 123.9 25.815.6 - - 1,160.0 920.5 Minority interests - - - - 54.950.1 - - - - 54.9 50.1 Shareholders’ equity 159.8 168.3 123.9 93.9 98.087.1 163.6 152.9 - - 545.3 502.2 Total liabilities and shareholders’ equity 880.5 798.4 468.4 364.0 297.7 306.8 412.3 453.5 --2,058.9 1,922.7 Gross investments in fixed assets 21.9 12.2 77.9 23.3 84.4 66.6 8.7 65.0 - - 192.9 167.1

Criteria The activity is divided into business sectors, each of which has a because the balance sheet items in the Building and Heavy risk and earnings different from the others. This grouping Construction Divisions are to a large extent correlated with the conforms with the grouping Veidekke uses for internal control level of activity. and reporting purposes. Non-distributed items Presentation In the Profit and Loss Account, some items are not shared The effect on profits of cash flow from the projects constitutes a between the areas of activity. Non-distributed items appear under substantial part of net financial items. The profit or loss before «Other activities» and consist mainly of: taxation therefore gives a more correct picture of the earnings of the areas of activity than operating profit or loss does. Financial • Elimination of inter-divisional turnover items and the profit or loss before taxation are therefore • Elimination of turnover/operating costs from associated presented in addition to the operating profit or loss. companies • Share of shipping partnerships’ profit or loss The share of turnover/operating costs for associated companies is • Winding-up of Con-Form’s activities entered as a gross figure under the individual area of activity. • Other minor undistributed items Under «Other activities», this has been eliminated and entered as a separate item, «Profit/loss associated companies». In 1994, the administration costs were not all shared between the areas of activity. The 1994 figures above are presented in accor- Since complete profit and loss accounts have thus been shown, dance with the principle applied for apportionment at that time. complete balance sheets are also presented for each area of activity. Minority interests Distribution of items that are not directly assignable Minority interests apply mainly to Korsbrekke og Lorck AS, Costs that are not directly assignable are shared in proportion to of which Veidekke owns 60 % (see Note 19). turnover. Inter-divisional transactions Balance sheet items that are not directly assignable to any of the 20 % of turnover from «Property» is rent from other areas of areas of activity, mainly liquid assets and shareholders’ equity, are activity. Market price at the time when the leases are signed is shared in proportion to turnover. This principle has been chosen used as basis for the charges.

20 Distribution of turnover by geographical market NOK 357.4 million (196.3) of the Group’s total turnover derives from operations outside Norway, totalling 9.0 % (6.2 %) of the

Turnover Building Heavy constr. Other activities Group 1995 1994 1995 1994 1995 1994 1995 1994 Norway 1,866.9 1,483.9 881.7 774.2 858.7 707.1 3,607.3 2,965.2 Other Nordic Countries - 4.0 25.0 1.4 - - 25.0 5.4 Germany 84.9 69.8 50.4 80.8 5.3 12.5 140.6 163.1 East Africa - - 174.1 76.5 - -66.7 174.1 9.8 Other countries - - 40.8 18.0 -23.1 - 17.7 18.0 Total 1,951.8 1,557.7 1,172.0 950.9 840.9 652.9 3,964.7 3,161.5

Orders-on hand Building Heavy constr. Group 1995 1994 1995 1994 1995 1994 Total 1,024 1,154 920 577 1,944 1,731 Of which due for completion within 12 months 919 1,085 755 450 1,674 1,535

2 TURNOVER 5 DEBTORS Turnover includes gains on sales of machinery etc. amounting to 1995 1994 NOK 11.0 million (15.4) and gains on sales of buildings/land Book debtors 565.3 520.0 amounting to NOK 7.2 million (NOK -1.4 million). Turnover Provision for bad debts -23.5 -21.7 also includes a gain of NOK 17.6 million on the sale of a share in Due from customers 94.4 45.0 partnerships. Completed, not invoiced 70.0 66.8 Invoiced, not completed -163.0 -154.7 Debtors 543.2 455.4 3 FINANCIAL ITEMS 1995 1994 Interest received 43.9 36.5 6 STOCKS Other financial income 4.7 2.6 Stocks include project stocks and Asphalt Division stocks. Project Financial income 48.6 39.1 stocks consist of materials, spare parts, tools etc., while Asphalt Interest charges, long-term loans -27.4 -30.2 Division stocks consist of crushed stone and raw materials for the Interest charges, short-term loans -15.7 -11.5 production of asphalt. Other financial expense -4.0 -4.3 Financial expense -47.1 -46.0 Net financial items 1.5 -6.9 7 DEVELOPMENT PROJECTS FOR SALE 1995 1994 Projects in progress 30.0 96.1 LIQUID ASSETS 4 Sites for development 17.9 14.8 1995 1994 Development projects for sale 47.9 110.9 Bank deposits 245.4 316.3 Short-term investments 50.0 - Veidekke also has sites for development under fixed assets Withheld tax on salaries and wages 38.2 28.6 (Note 11). Securities 50.0 20.4 Shares 4.5 6.3 Development projects for sale are mainly concerned with house- Liquid assets 388.1 371.6 building for Veidekke’s own account for sale. The item «Projects in progress» above consists of costs incurred on units that have not been taken to income. Projects for Veidekke’s own account that have been taken to income, but not paid for, are entered under «Debtors» (completed, not invoiced).

21 Notes

8 SHARES IN SUBSIDIARIES

Total share capital Ownership share in % Nominal value Book value Korsbrekke og Lorck AS 5.0 60 3.0 16.9 A/S Noremco Construction 5.0 100 5.0 10.9 Hokksund Pukkverk A/S 0.1 50 - 9.5 Veidekke AB SEK 0.2 100 SEK 0.2 0.2 Veidekke Eiendom A/S 5.0 100 5.0 5.1 Veidekke Finans A/S 5.0 100 5.0 5.0 Veidekke GmbH DEM 0.5 100 DEM 0.5 2.2 Con-Form Polen Invest A/S 2.0 100 2.0 - Prosjektutvikling Bergen A/S 0.9 100 0.9 1.2 Krafttak HF ISK 10.0 90 ISK 9.0 0.9 Beitostølen Eiendomsutvikling A/S 0.2 90 0.2 0.1 Veidekke Energi AB SEK 0.1 100 SEK 0.1 0.1 Sogndal Postgård A/S 0.1 100 0.1 - Tandbergåsen Utbygging A/S 0.1 60 - - Owned by Veidekke ASA 52.1 Hokksund Pukkverk A/S 0.1 50 - 2.5 Con-Form Ltd. PZL 0.1 100 PZL 0.1 - Owned through subsidiaries 2.5

In 1995 Veidekke purchased the remaining shares in A/S Noremco Construction (previously owned 48 %). Subsidiaries Nor-Vei A/S, Ottersbo Pukkverk A/S and Napastaa Entreprenør A/S have been merged with Veidekke ASA. Oslo Asfalt A/S has merged with Veidekke’s subsidiary Korsbrekke og Lorck AS. Con-Form A/S has been sold.

9 SHARES IN ASSOCIATED COMPANIES

Total share Ownership- Nominal Value in Value in Result for capital share in % value company Group the year A/S Kongsvinger Asfalt 2.0 50 1.0 1.0 5.8 0.2 Norwegian Construction Group Nocon AS 6.0 50 3.0 3.0 3.0 - A/S Fosskvartalet 0.1 50 0.1 - 1.4 0.1 Stølstunet A/S 0.1 50 - 1.7 1.7 - Other companies 1.5 1.5 - Owned by Veidekke ASA 7.2 13.4 0.3 Benull A/S 40.0 43 17.0 17.0 17.0 - Martin Haraldstad A/S 0.1 50 0.1 2.0 2.4 1.0 Skollenborg Pukkverk A/S 0.2 34 0.1 1.4 1.4 - Other companies 1.1 1.1 - Owned by subsidiaries 21.5 21.9 1.0 Total Group 28.7 35.3 1.3

10 LONG-TERM RECEIVABLES ETC.

1995 1994 Loan to partners 29.3 26.9 Loan to customers 22.4 11.3 Loan to associated companies 20.2 22.4 Loan to employees 17.4 13.2 Deferred tax benefit 7.9 11.2 Share in shipping partnerships 5.3 6.1 Net pension funds 4.0 3.0 Miscellaneous shares 3.1 2.7 Other 6.6 8.7 Long-term receivables etc. 116.2 105.5

22 11 FIXED ASSETS Accum. Book Depre- Depre- Cost depre- value ciation ciation 1 Jan. Additions Disposals ciation 31 Dec. for year in % Goodwill 33.9 2.8 1.7 22.8 12.2 7.320 Machinery etc. 919.0 165.5 133.8 663.9 286.8 84.6 15-25 Buildings 494.9 23.123.7 105.4 388.9 15.22-5 Land 136.0 1.5 5.0 - 132.5 - Total 1,583.8 192.9 164.2792.1 820.4 107.1

«Land» includes properties for development with a book value at 31 December of NOK 77.4 million (82.0).

Investments in and sale (sales price) of fixed assets

1995 1994 1993 1992 1991 Inv. Sale Inv. Sale Inv. Sale Inv. Sale Inv. Sale Goodwill 2.8 - 7.1 - 3.9 - 6.9 - 31.4 - Machinery etc. 165.5 33.2 86.6 24.2 68.1 25.6 101.5 26.1 109.7 20.4 Buildings 23.1 29.0 69.6 17.8 23.8 18.4 23.2 129.8 114.5 40.8 Land 1.5 5.1 3.8 3.7 33.7 12.6 5.4 22.5 58.5 13.1 Total 192.9 67.3 167.1 45.7 129.5 56.6 137.0 178.4 314.1 74.3

12 DEBTS TO CREDIT-ISSUING INSTITUTIONS 1995 1994 Withdrawal rights 6.7 3.0 Project financing - 82.8 Debts to credit-issuing institutions 6.7 85.8

13 CREDITORS ETC. «Creditors» include accrued costs (accrued, not entered) and provisions for work under guarantee.

14 UNPAID GOVERNMENT CHARGES ETC. These include unpaid VAT, withheld tax, social security contributions, holiday pay, etc.

15 OTHER SHORT-TERM LIABILITIES 1995 1994 Tax payable 33.7 63.1 Dividend payable 19.5 15.1 Advance payments from customers 72.5 11.6 Other liabilities 23.0 30.2 Other short-term liabilities 148.7 120.0

23 Notes

16 LONG-TERM LIABILITIES

Book value 31.12.94 Repaid 1995 New loans 1995 Book value 31.12.95 Loans secured in buildings/land 283.7 34.8 6.4 255.3 Other loans 80.4 56.6 12.9 36.7 Total 364.1 91.4 19.3 292.0 Net pension commitments 39.4 28.1 Long-term liabilities 403.5 320.1

Repayment structure 1996 1997 1998 1999 2000 After 2000 Loans secured in buildings/land 18.2 28.1 13.6 13.8 11.5 170.1 Other loans 6.3 6.4 4.2 4.4 4.3 11.1 Total 24.5 34.5 17.8 18.2 15.8 181.2

42 % (79 %) of Veidekke’s loan portfolio is due for interest-rate adjustment in 1996. At 31 December 1995 the average interest rate was 7.4 % (7.3 %). The Group has unused withdrawal rights amounting to NOK 372 million (350), of which NOK 322 million (192) derive from long-term loan agreements.

17 PENSIONS Veidekke has a collective pension scheme for its employees that is covered by an agreement with an insurance company. Veidekke also has unsecured pension commitments paid directly out of operations.

1995 1994 Veidekke ASA Kolo *) Group Group Secured Unsecured Secured Total Total Pension expenses Earned during year (present value) 9.4 0.2 0.2 9.8 10.9 Interest on commitments 11.7 1.6 1.0 14.3 14.9 Return on funds -13.6 - -2.5 -16.1 -15.9 Change over-financing - - 0.6 0.6 1.1 Pension expenses 7.5 1.8 -0.7 8.6 11.0 Entered in Balance sheet Pension funds 187.3 - 33.1 220.4 215.6 Pension commitments (present value) -182.9 -25.3 -14.4 -222.6 -234.5 Net funds/commitments 4.4 -25.3 18.7 -2.2 -18.9 Deviation in estimate not entered in P&L Account -8.5 1.3 3.3 -3.9 - Over-financed not entered - - -18.0 -18.0 -17.4 Net funds/commitments entered in Balance Sheet -4.1 -24.0 4.0 -24.1 -36.3 *) Korsbrekke og Lorck AS

NOK 4.0 million of net pension funds/pension commitments is entered under long-term receivables etc., while NOK 28.1 million is entered as a long-term liability. Pension commitments and the amount earned during the year include employer’s contributions.

An annual deviation occurs between the estimated and actual return on pension funds and between estimated and actual pension commitments. The deviation in estimate is entered in the Balance Sheet until 10 % is reached of pension funds or pension commitments, whichever is largest. When the accumulated deviation exceeds this limit, the excess amount is entered in the Profit and Loss Account over the remaining accumulation period.

Financial assumptions (%) 1995 1994 Return on pension funds 8.0 8.0 Discount rate 7.0 7.0 Annual wage growth 3.3 3.3 Annual basic pension rate adjustment 3.3 3.3 Annul adjustment of pension being paid 2.5 2.5

24 18 TAX 21 SHAREHOLDERS’ EQUITY TAXATION 1995 1994 1995 1994 Tax payable 12.1 58.8 Shareholders’ equity 1 January 502.2 553.5 Deferred tax 8.4 -52.8 Profit for year 50.7 -6.9 Taxation 20.5 6.0 Dividends -17.1 -11.2 New accounting standard for pension exp. - -40.8 DEFERRED TAX 1995 1994 Sales of own shares - 7.6 Timing differences Currency adjustment 1.5 - Short-term items 80.0 40.5 New issue 8.0 - Accelerated depreciation 36.8 45.2 Shareholders’ equity 31 December 545.3 502.2 Gain and loss account 80.8 99.3 Other long-term items -13.0 -17.9 Own shares are included in other shareholders’ equity at Basis deferred tax 184.6 167.1 NOK -0.4 million (-0.4). Deferred tax (28%) 51.7 46.8 Deferred tax benefit* 7.9 11.2 MORTGAGES, GUARANTEES AND JOINT * Calculated on pension commitments of NOK 28.1 million (40.0). 22 AND SEVERAL LIABILITY 19 MINORITY INTERESTS 1995 1994 Loans secured in buildings/land 255.3 283.7 1995 1994 Book value of mortgaged buildings 303.5 325.4 Minority interests 1 January 50.1 47.3 Book value of mortgaged buildings 33.5 32.8 Minority share of profit for year 7.2 6.1 Dividends -2.4 -4.0 1995 1994 New accounting standard for pension exp. - -3.7 Guarantees to employees 7.9 7.9 Sales of own shares - 5.1 Guarantees to associated companies 3.2 48.5 Additions/disposals - -0.7 Other guarantees 16.4 30.3 Minority interests 31 December 54.9 50.1 Committed limited partnership capital not expected to be called up 0.5 55.7 Minority share of profit/loss account items 1995 1994 Guarantees 28.0 142.4 Turnover 88.1 74.4 Operating costs -80.4 -67.4 The Group has issued negative mortgage declarations for loans Operating profit 7.7 7.0 and guarantees. Net financial items 2.2 1.3 Profit before taxation 9.9 8.3 Veidekke ASA has furnished guarantees to subsidiaries for a total Taxation -2.7 -2.2 of NOK 233.3 million (156.2). Of this, NOK 109.3 million Minority share of profit for year 7.2 6.1 (131.4) is a joint and several liability for subsidiaries’ withdrawals in the Group account system in the bank. These guarantees have The minority interests derive primarily from Korsbrekke og Lorck been eliminated in the consolidated accounts. AS of which Veidekke owns 60 %. As a result of its participation in partnerships and joint ventures, 20 SHARE CAPITAL Veidekke could become liable for other participants’ inability to fulfil their obligations. However, Veidekke cannot be called to Veidekke ASA’s share capital at 31 December consists of 5,697,830 account until the company in question actually fails to fulfil its shares of NOK 10.- each. The Group owns 80,328 shares in Veidekke ASA through Korsbrekke og Lorck AS. These shares obligations. were acquired before the Group was formed. The average number of outstanding shares in 1995 was 5,555,002 (5,509,169). 23 PROJECTS IN PROGRESS Shares held by Board Members and President and CEO: The remaining turnover on loss bringing projects is NOK 196 million (75). Provision has been made in the accounts for the anti- Number of shares cipated losses on these projects. Christian Bruusgaard, Chairman of the Board 5,018 Flemming Vejgaard Andersen, Board Member 275 The accumulated income for ongoing projects is NOK 1,609 Helge B. Andresen, Board Member 4,754 million (1,169). NOK 83 million (-13) has been taken to income. Arve Johnsen, Board Member 1,500 Steinar Krogstad, Board Member 50 Kåre Strand, Board Member 1,604 Terje R. Venold, President and CEO 11,300 Total 24,501

25 Profit and loss account

VEIDEKKE ASA (Figures in NOK million) Note 1995 1994

TURNOVER 3,410.9 2,713.4

Subcontractors -1,450.6 -992.0 Cost of materials -922.3 -735.5 Wages and social costs A -748.7 -681.3 Other operating expenses B -159.0 -241.4 Depreciation E -70.6 -65.3 Bad debts -25.2 -3.0

Total operating costs -3,376.4 -2,718.5

OPERATING PROFIT 34.5 -5.1

Financial income C 40.3 45.7 Financial expense C -26.4 -40.4 Share of profit limited partnerships, ships 3.3 10.3

PROFIT BEFORE TAXATION 51.7 10.5

Tax payable -0.6 -49.3 Change deferred tax -12.5 45.0

PROFIT FOR THE YEAR 38.6 6.2

Transfers: Group contribution 2.0 4.5 Dividend 17.1 11.2 Legal reserve 11.0 2.1 Restricted revenue reserve -9.5 -9.5 Distributable reserve 18.0 -2.1

TOTAL TRANSFERS 38.6 6.2

26 Balance Sheet

VEIDEKKE ASA (Figures in NOK million) ASSETS AT 31 DECEMBER Note 1995 1994

Liquid assets 378.0 318.2 Debtors 411.1 355.0 Short-term receivables, group companies 22.8 40.0 Other short-term receivables 14.0 13.7 Stocks 6 71.5 40.0 Development projects for sale 46.0 107.0

TOTAL CURRENT ASSETS 943.4 873.9

Shares in subsidiaries 8 52.1 50.0 Shares in associated companies 9 7.2 9.5 Long-term receivables etc. D 81.2 96.4 Long-term receivables, group companies 77.3 60.3 Goodwill E 0.0 0.8 Machinery etc. E 210.1 161.6 Buildings E 175.5 182.1 Land E 96.8 99.5

TOTAL FIXED ASSETS 700.2 660.2

TOTAL ASSETS 1,643.6 1,534.1

LIABILITIES AND SHAREHOLDERS’ EQUITY AT 31 DECEMBER

Debts to credit-issuing institutions 6.5 83.6 Creditors 13 704.8 504.4 Unpaid government charges, etc. 14 145.3 143.5 Short-term debt, group companies 7.7 6.3 Other short-term debts F 103.4 89.3

TOTAL CURRENT LIABILITIES 967.7 827.1

Long-term liabilities 17 175.9 252.4 Deferred tax G 44.9 35.2

LONG-TERM LIABILITIES 220.8 287.6

Share capital (5,697,830 shares at NOK 10 each) 57.0 56.2 Legal reserve 61.9 43.6 Restricted revenue reserve 9.6 19.1 Distributable reserve 326.6 300.5

TOTAL SHAREHOLDERS’ EQUITY H 455.1 419.4

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 1,643.6 1,534.1

Secured liabilities I 121.8 134.8 Guarantees 22 261.3 298.6

27 Statement of cash flows

VEIDEKKE ASA (Figures in NOK million) 1995 1994

CASH FLOWS FROM OPERATION ACTIVITIES

Profit before taxation 51.7 10.5 Depreciation 70.6 65.3 Gain on sale of fixed assets and shares in partnerships -34.2 -13.1 Tax paid -30.9 -5.6 Share of profit limited partnerships, ship -3.3 -10.3 Net change in receivables, stock, development projects for sale -1.8 -12.5 Net change in current liabilities excluding short-term borrowing, dividends and tax payable 236.5 9.9 Net cash from operating activities (A) 288.6 44.2

CASH FLOWS FROM INVESTMENT ACTIVITIES

Purchase of property, plant and equipment -123.0 -75.2 Proceeds from sale of property, plant and equipment 41.4 39.7 Proceeds from sale of shares in partnerships 17.6 0.0 Other investments (net) -4.9 24.2 Net cash from investment activities (B) -68.9 -11.3

CASH FLOWS FROM FINANCING ACTIVITIES

New long-term borrowing 5.8 1,0 Repayment long-term debts -90.9 -15.0 Change in short-term borrowing -77.1 47.2 New issue 8.0 0.0 Group contribution paid -4.5 -37.1 Dividend paid -11.2 -15.5 Net cash from financing activities (C) -169.9 -19.4

NET INCREASE IN LIQUID ASSETS (A+B+C) 49.8 13.5

Liquid assets at 1 January 328.2 304.7 Liquid assets at 31 December 378.0 318.2

Liquid assets at 1 January include NOK 10.0 million from merged companies

28 Notes to the accounts

VEIDEKKE ASA (Figures in NOK million) The accounting policies on pages 17 to 19 and part of the notes for the Group, also apply to the parent company.

A SALARIES Remuneration to Board Members amounts to NOK 505,000.-, while the President and CEO’s salary amounts to NOK 990,619.-.

B OTHER OPERATING COSTS Remuneration to the company’s auditors amounts to NOK 1,405,000.- for audit fees and NOK 292,700.- for consultancy fees.

C FINANCIAL INCOME AND FINANCIAL EXPENSE Financial income includes dividends of NOK 7.3 million (4.2), of which NOK 6.0 million (3.0) was paid from subsidiaries to the parent company. Other financial income from subsidiaries amounts to NOK 0.3 million (3.0). Financial expense to subsidiaries amounts to NOK 0.0 million (0.0).

D LONG-TERM RECEIVABLES ETC. Long-term receivables etc. include a deferred tax benefit of NOK 7.9 million (11.2).

E FIXED ASSETS Accumulated Book value Depreciation Cost 1 Jan Mergers Additions Disposals depreciation 31 Dec. for year Goodwill 5.7 - - 1.4 4.3 - 0.9 Machinery etc. 673.5 11.7 109.4 101.7 482.8 210.1 60.4 Buildings 238.1 2.4 12.1 11.7 65.4 175.5 9.3 Land 99.5 - 1.5 4.2 - 96.8 - Total 1,016.8 14.1 123.0 119.0 552.5 482.4 70.6

F OTHER SHORT-TERM LIABILITIES Accrued taxes payable amount to NOK 19.7 million (50.0). Dividends payable amount to NOK 17.1 million (11.2).

G TAX TAXATION 1995 1994 Difference between accounting profit and profit assessable for tax purposes Profit before taxation 51.7 10.5 Permanent differences -4.0 -1.4 Change in timing differences -44.8 171.6 Difference accounting/assessed tax timing differences 76.8 - Profit assessable for tax purposes 79.7 180.7

DEFERRED TAX 1995 1994 Timing differences Short-term items 84.1 37.8 Accelerated depreciation 29.0 37.2 Gain and loss account 64.3 78.7 Other long-term items -17.0 -28.0 Basis deferred tax 160.4 125.7 Deferred tax (28 %) 44.9 35.2 Deferred tax benefit * 7.9 11.2 * Calculated on net pension commitments of NOK 28.1 million (40.0).

29 Notes

H SHAREHOLDERS’ EQUITY 1995 1994 Shareholders’ equity at 1 January 419.4 464.3 Merger 8.2 - New issue 8.0 - Profit for the year 38.6 6.2 Dividends -17.1 -11.2 Group contribution -2.0 -4.5 New accounting standard for pension expenses - -35.4 Total shareholders’ equity at 31 December 455.1 419.4

I SECURED LIABILITIES 1995 1994 Loans secured in buildings/land 121.8 134.8 Book value of mortgage buildings 129.2 143.7 Book value mortgage land 14.1 13.4

Auditors’ report for 1995 To the Annual Shareholders’ Meeting of Veidekke ASA

We have audited the annual report and accounts of Veidekke ASA for 1995, showing a net income for the year of NOK 38.6 million for the parent company and a consolidated profit for the year of NOK 50.7 million. The annual report and accounts, which comprise the report of the Board of Directors, the profit and loss account, the balance sheet, the statement of cash flows, the accounting policies, the notes to the accounts and the Group accounts, are presented by the company’s Board of Directors and its President and CEO.

Our responsibility is to examine the company’s annual report and accounts, its accounting records and other related matters.

We have conducted our audit in accordance with relevant laws, regulations and Norwegian generally accepted auditing standards. We have performed those audit procedures considered necessary to confirm that the annual report and accounts are free of material misstatements. We have examined selected parts of the evidence supporting the accounts and assessed the accounting principles applied, the estimates made by management, and the contents and presentation of the annual report and accounts. To the extent required by Norwegian generally accepted auditing standards, we have reviewed the company’s internal control and the management of its financial affairs.

The Board of Directors’ proposal for the allocation of the profit for the year and transfers between equity accounts complies with the provisions of the Norwegian Joint-Stock Companies Act.

In our opinion, the annual report and accounts have been prepared in accordance with the requirements of the Norwegian Joint-Stock Companies Act and present fairly the financial position of the company and group as of 31 December 1995 and the result of its operations for the year ended, in conformity with Norwegian generally accepted accounting principles.

Oslo, 27 February 1996 ERNST & YOUNG AS

Ernst Alsaker State Authorized Public Accountant (Norway) Note: The translation into English has been prepared for information purposes only

30 Key figures

1995 1994 1993 1992 1991

OPERATIONS * Turnover 3,965 3,162 3,137 3,665 3,640 Operating profit 72.3 7.8 63.9 93.7 69.4 Profit before taxation 78.4 5.2 75.2 81.2 74.7 Ordinary profit for the year 1) 50.7 -6.9 48.3 47.5 42.1 Orders-on-hand excluding asphalt operations 1,944 1,731 1,358 1,205 1,712

PROFITABILITY Gross profit margin (%) 2.0 0.2 2.4 2.2 2.1 Return on total assets (%) 2) 6.3 2.7 6.4 7.9 7.8 Return on working capital (%) 3) 12.1 4.6 11.7 15.2 13.4 Return on equity (%) 4) 10.0 -0.1 9.3 9.9 9.4

CAPITAL ADEQUACY * Total assets 2,059 1,923 1,910 1,999 2,191 Total shareholders’ equity 5) 600 552 601 572 538 Equity ratio (%) 6) 29.2 28.7 31.5 28.6 24.6 Investments 193 167 130 137 314

LIQUIDITY Liquidity 31 December * 388 372 367 359 431 Current ratio 7) 1.00 1.08 1.15 1.09 1.06 Quick ratio 8) 0.88 0.91 0.97 0.95 0.93 Net interest-bearing debt * 9) -104.8 11.1 -7.6 -5.2 85.5

SHARES Market price 31 December 126.25 116.50 170.00 68.00 102.00 Earnings per share (NOK) 10) 9.13 -1.25 8.84 8.70 7.74 Market price/earnings (P/E) 13.8 - 19.2 7.8 13.2 Cash flow per share (NOK) 11) 29.95 6.65 30.64 31.44 31.85 Market price/cash flow 4.2 17.5 5.5 2.2 3.2 Dividend per share (NOK) 3.00 2.00 2.75 2.25 2.25 Outstanding shares (average 1,000) 5,555 5,509 5,463 5,463 5,439

EMPLOYEES Number of employees 31 December 2,888 2,785 2,694 2,869 3,007 Wages and social benefits * 847 749 775 873 849

* Figures in NOK million

All the key figures have been revised to include deferred tax. A new accounting standard for pension expenses was introduced in 1994. The key figures for earlier years have not been revised.

1) Ordinary profit for the year: Profit for the year plus extraordinary items less tax on extraordinary items. 2) Return on total assets: Profit before taxation plus financial expense as a percentage of average total assets. 3) Return on working capital: Profit before taxation plus financial expense as a percentage of average total assets less interest-free short-term and interest-free long-term debts. 4) Return on equity: Profit after taxation as a percentage of average total shareholders’ equity. 5) Total shareholders’ equity: Book equity including minority interests. 6) Equity ratio: Total equity as a percentage of total assets at 31 December. 7) Current ratio: Current assets divided by short-term liabilities. 8) Quick ratio: Most liquid current assets divided by short-term liabilities. 9) Net interest-bearing debt: Short-term interest-bearing debt plus long-term interest-bearing debt less liquid assets and interest-bearing receivables from project financing. 10) Earnings per share: Ordinary profit for the year divided by the average number of outstanding shares (fully watered down). 11) Cash flow per share: Profit before extraordinary items plus ordinary depreciation less tax payable on ordinary profit less minority interests divided by the average number of outstanding shares.

31 Shareholder policy and ownership structure

It is Veidekke’s aim to give Shareholder policy Veidekke aims to secure for its shareholders a high, stable return over time on its shareholders a high, their investment in Veidekke shares. The shareholders’ return is a combination of the share value and share dividend, and should reflect the financial develop- stable return over time ment in the company. Veidekke emphasises the importance of supplying the market with correct, relevant information at the right time. Veidekke shares on their investment in shall be regarded as a liquid and interesting investment option. Existing shareholders shall have pre-emption rights when the share capital is increased. Veidekke shares. Exceptions may be made if special circumstances indicate that a private offer is more expedient, for example in the case of offers of shares to Veidekke’s employees.

Dividend per share Dividend policy It is Veidekke’s aim to pay a competitive dividend that gives its shareholders a NOK 3.50 substantial share in the profit. Veidekke aims to pay out dividends over time averaging between 25 % and 40 % of the company’s profit for the year. For the 3.00 past five years Veidekke has paid dividends giving a ratio of about 25 %. The 2.50 Board of Directors will recommend to the Annual General Meeting that the divi-

2.00 dend for 1995 be set at NOK 3 per share (a total of NOK 17,093,490) which gives a payout ratio of 33 %. 1.50 Ownership structure 1.00 At 31 December 1995, Veidekke had 2,245 shareholders including 53 foreign 0.50 investors. The percentage of shares owned by foreign investors fell from 20 % to

0 13.4 % during the past year. There were no other significant changes in the 1991 1992 1993 1994 1995 ownership structure during the year. Folketrygdfondet is the company’s largest shareholder with 11.1 %, while the employees hold about 10 % of the shares. 1,014 employees hold shares in the company.

Share structure Number of Number of From To shareholders shares % 1 - 100 1,242 48,362 0.8 101 - 1,000 742 245,269 4.3 1,001 - 10,000 177 677,737 11.9 10,001 - 100,000 72 1,963,045 34.5 100,001 - 12 2,763,417 48.5 Total 2,245 5,697,830 100.0

Veidekke shares have been quoted on the Oslo Stock Exchange’s main list since 1986.

Employee-owners It is an advantage for Veidekke as a company, and thus for all of its shareholders, to have employees who hold a substantial number of shares in the company. The value of a construction company depends to a very large degree on its organisation and on its employees. The involvement of the employees is therefore an important, positive element in the development of the company. It is

32 desirable that persons in senior management positions each hold a significant Market price/earnings (P/E) number of shares. 20

Veidekke seeks to encourage greater employee ownership and as part of this 16 policy, Veidekke’s employees are given the chance each year to purchase shares 14 in the company that are being sold or issued. In 1995, each employee was given 12 the opportunity to purchase up to 200 shares. The 574 employees who made use 10 of this offer purchased at total of 75,000 shares. Veidekke gives financial assis- 8 tance to employees when they purchase employee shares. 6

A detailed list of the shares held by the Board of Directors and the President and 2

CEO is given in Note 20. 0 1991 1992 1993 1994 1995 Inside information Veidekke emphasises the importance of implementing current legislation regar- Shareholders as at 31 December 1995 ding the handling of inside information and the rules for the reporting of share transactions in the company’s routines. Veidekke keeps special registers of share transactions by persons who are governed by the rules. The company has also drawn up internal rules which have been made known to all employees in key positions and to senior union representatives. The rules entail that some people are not permitted to trade in the company’s shares at certain times. Transactions are kept under continuous supervision and the company submits lists of ■ Credit institutions and unit trusts 19 % purchases and sales to the Oslo Stock Exchange once every two months. ■ Insurance comp. and private pension funds 29 % Purchases and sales of Veidekke’s shares by insiders are reported as they are ■ Private companies 9 % made. ■ Employees and Members of the Board 10 % ■ Foreign investors 13 % Share capital ■ Individuals 8 % ■ State companies 11 % Veidekke’s share capital was NOK 57 million at 31 December 1995, divided into ■ Own shares 1 % 5,697,830 shares of NOK 10 each. The changes in Veidekke’s share capital since it was accepted for listing on the Oslo Stock Exchange in 1986 are shown below.

Form of issue Amount Number of Share Adjustment paid shares after capital after factor* increase increase (NOK mill.) (1,000) (NOK mill.) 1986 Issue, price 57.50 25.3 3,053 30.5 1986 Issue employees, price 51.75 3.1 3,113 31.1 1988 Bonus issue 1:5 3,736 37.4 0.8333 1989 Merger Hesselberg Vei 4,693 46.9 1989 Dividend shares 0.5 4,746 47.5 0.998 1990 Merger Folke A. Axelson A/S 4,802 48.0 1990 Dividend shares 0.6 4,861 48.6 0.9999 1991 Merger Stoltz Røthing Haugesund A/S 4,912 49.1 1991 Merger Aker Entreprenør A/S 5,623 56.2 1995 Issue employees, price 107.- 8.0 5,698 57.0

* The adjustment factor has been calculated according to the standards of the Norwegian Financial Analyst’ Association.

33 Earnings per share Authorisation to issue shares

NOK The Annual General Meeting on 27 April 1995 adopted a resolution authorising 10 the Board of Directors to issue up to one million shares. This authorisation is valid until 1 July 1997. To the greatest extent possible, resolutions concurring 8 changes in share capital will be passed by the General Meeting. This authorisa-

6 tion, granted to the Board of Directors for two years at a time since 1986, has mainly been used to issue shares to employees and in connection with minor 4 mergers.

2 Contact with investors

0 Veidekke deems it important to keep the market continuously informed about the company’s development. -2 1991 1992 1993 1994 1995 When annual and interim reports are published, Veidekke normally holds presentations for shareholders, brokers, analysts and the press in Norway and

Cash flow per share abroad. The company also keeps in touch with investors and analysts. A number of brokerage houses at the Oslo Stock Exchange carry out analyses of Veidekke NOK 35 shares.

30 The company publishes information in Norwegian and English. The dates for

25 quarterly reports in 1996 are shown on the 2nd cover page.

20 RISK adjustment

15 The RISK amount is calculated annually based on the change in Veidekke’s retained, taxed capital divided by the number of outstanding Veidekke shares. 10 Only Norwegian shareholders are allowed to adjust their cost price by a RISK 5 amount. The amount is valid for Norwegian shareholders on 1 January of the

0 following year. 1991 1992 1993 1994 1995

Veidekke’s share prices compared with Oslo Stock Exchange’s total index (price and total index normalised as from 1 January 1991).

200

180 Total index 160

140

120

100

80 Veidekke share

0 JAN 91 JAN 92 JAN 93 JAN 94 JAN 95 JAN 96

34 VEIDEKKE SHARE 1995 1994 1993 1992 1991 Market price at 31 December (NOK) 126.25 116.50 170.00 68.00 102.00 - high 146.00 236.00 170.00 110.00 135.00 - low 115.00 101.00 68.00 62.00 90.00 Earnings per share (NOK) 9.13 - 1.25 8.84 8.70 7.74 Price/earnings (P/E) 13.8 - 19.2 7.8 13.2 Cash flow per share (NOK) 29.95 6.65 30.64 31.44 31.85 Price/cash flow 4.2 17.5 5.5 2.2 3.2 Dividend per share (NOK) 3.00 2.00 2.75 2.25 2.25 Payout ratio 32.9 - 31.1 25.9 29.1 Earnings yield (%) 2.4 1.7 1.6 3.3 2.2 Outstanding shares (average ’000)1) 5,555 5,509 5,463 5,463 5,439 Market value at 31 Dec. (NOK mill.) 719.4 655.1 955.9 382.4 573.5 Number of shareholders at 31 Dec. 2,245 1,998 1.907 1,897 1,960 RISK amount 5.302) 8.86 -5.01 0.00 -

1) The number of outstanding shares has been adjusted by shares owned by the company. 2) Estimate: The final Risk amount is fixed by the tax authorities and shareholders as notified direct by the Norwegian Registry of Securities.

Veidekke share’s price development and volume traded on the Oslo Stock Exchange.

NOK 300

270

240

210

180

150

120

90 Veidekke share 60 Volume 300 000 30 270 000 240 000 0 210 000 180 000 150 000 120 000 90 000 60 000 30 000 0 JAN 91 JAN 92 JAN 93 JAN 94 JAN 95 JAN 96

LARGEST SHAREHOLDERS AT 31 DECEMBER 1995 Folketrygdfondet 11.1% Avansefondene 8.5% Vital Forsikring 7.1% Norsk Hydros Pensjonskasse 5.6% Gjensidige Liv- og skadeforsikring 5.0% Uni Storebrand Livsforsikring 3.5% Aksjefondet K-Vekst 3.0% Skandinaviska Enskilda Banken 2.9% Vesta Forsikring 2.7% Morgan Guaranty Trust 2.2%

35 The Corporate Management

Veidekke’s divisional TERJE R. VENOLD Terje Venold (45), President and CEO. heads and staff manage- Graduated from the Norwegian School of Management (BI) with an MBA in ment are members of the 1973. Started working for Veidekke in 1981. Was appointed President and corporate management. CEO in 1989. Number of shares in Veidekke: 11,300.

PETTER EIKEN Petter Eiken (40), Senior Vice President, Building. Graduated from the Norwegian Institute of Technology in Trondheim in 1980. Has been working for Veidekke since 1986, in present position since 1994. Deputises for the President and CEO. Number of shares in Veidekke: 3,032.

OLE ARNFINN OPSAHL Ole Arnfinn Opsahl (40), Senior Vice President, Heavy Construction. Graduated from the Norwegian Institute of Technology in 1978. Took his doctorate in concrete technology in 1986. Has been working for Veidekke since 1987, in present position since 1994. Number of shares in Veidekke: 4,184.

LEIF E. JOHANSEN Leif E. Johansen (51), Senior Vice President, Property. Graduated from the Norwegian Institute of Technology in 1967. Appointed head of the Property Division in 1995. Number of shares in Veidekke: 3,700.

36 EIGIL FLAATHEN Eigil Flaathen (51), Managing Director of Korsbrekke og Lorck AS. Graduated from the University of Washington, USA, with a degree in engineering in 1968. Has been working for Veidekke since 1977. Head of Veidekke’s subsidiary, Korsbrekke og Lorck AS, since 1993. Number of shares in Veidekke: 11,439.

VIDAR AARVOLD Vidar Aarvold (44), Senior Vice President, Asphalt. Graduated with a B.Sc. (Eng.) from the University of Sunderland, England, in 1976. Previously employed by Veidekke from 1976 to 1988. Appointed head of the Asphalt Division in December 1995.

DAG ANDRESEN Dag Andresen (34), Senior Vice President, Corporate Staff with responsibility for financial control, finance/ investor relations, IT, logistics, and legal affairs. Graduated from the Norwegian School of Management (BI) in 1986. Has been working for Veidekke since 1986, in present position since 1995. Number of shares in Veidekke: 3,150.

TORKEL BACKELIN Torkel Backelin (52), Senior Vice President, Corporate Staff with responsibility for organisational development, personnel, health and safety, quality assurance, information, industrial policy, strategy and R&D. Graduated from the Stockholm School of Economics in 1965. Employed by Veidekke since 1989, in present position since 1995. Number of shares in Veidekke: 8,080.

BUILDING

Veidekke has reinforced The market After a relatively steep rise in the price of houses and in the commencement of its position in the buil- new dwellings in 1994, 1995 was characterised by a far slower growth in prices for second-hand dwellings and a slight decline in new building. The decline was ding market. Project about 6 % for the country as a whole, but it was most noticeable in Oslo. These selection, further deve- developments may be a sign of balance in the housing market. lopment of core exper- However, the most important economic factors affecting the demand for housing seem to indicate that demand will remain high, especially in the central tise and customer orien- regions of Norway. The interest rate for housing loans will remain low in 1996 and employment is rising. On the other hand, housebuilding may continue to be tation will be important restricted in 1996 by the lack of centrally located sites that are ready for success factors in the building. On the whole, we therefore expect about the same number of dwellings to be started on in 1996 as in 1995. future. The commencement of commercial building reached 2.7 million square metres in 1995. This is a growth of about 11 % compared with the year before. From rock bottom in 1991, when 1.9 million square metres were started on, newbuilding has increased by as much as 44 %. The 1995 level was, however, only 64 % of the boom year 1987. The steep growth in 1995 was due primarily to large building projects linked with the development at Gardermoen and the new national hospital. There is little to indicate that we are going to experience another building boom like the one we had in the eighties. Although conditions in the Norwegian economy are right for an increase in demand for commercial building in 1996, we believe the newbuilding figures may be slightly lower than in 1995.

The increase in building activity varied somewhat in the different counties in 1995. For residential and commercial building seen as a whole, growth was most marked in Oslo at 22 % and in Sogn og Fjordane at 45 %. Sør Trøndelag showed a growth of 24 %. This must be seen in conjunction with the steep decline the year before (70 %). The counties of Vestfold, Rogaland, Hordaland The Ski Shopping Centre was built as a and the three most northerly counties, seen as a whole, showed a marked turnkey contract following direct negotiations with the client, Olav Thon Eiendom. decline. Negotiated contracts are one of Veidekke’s priority areas. This type of Activities contract is based on mutual trust and The Building Division had a turnover for 1995 of NOK 1,952 million (NOK satisfactory work for the client in the past. On the previous page: 1,558 million). The profit for the year rose from NOK 13 million in 1994 to Carpenter Tommi Lund. NOK 34.5 million in 1995, mainly as a result of internal improvements but also due to the growth in the market described above. The profit and profit margin NOK million Building 1995 1994 have thus been doubled from 1994 to 1995. At the same time, Veidekke rein- Turnover 1,951.8 1,557.7 forced its market position, particularly in priority areas such as negotiated Operating profit 10.9 -3.9 contracts. In the further development of the Building Division, project selection, Profit before taxation 34.5 13.0 Shareholders’ equity 159.8 168.3 development of core expertise and customer orientation will be regarded as Total assets 880.5 798.4 success factors. The growth in turnover can be ascribed mainly to a greater use Gross purchase of property plant and equipment 21.9 12.2 of subcontractors. Employment in the Building Division remained virtually unchanged in 1995.

39 Orders-on-hand Negotiated contracts that were completed in 1995 include the Arctic Hotel in NOK mill. Tromsø for Rica Hotels and the Ski Shopping Centre for Olav Thon Eiendom. 1,200 Still in progress at the end of the year were the Vinterbro Centre, the Amanda Centre in Haugesund, the Textiles and Fashion Centre at Skøyen in Oslo and the 900 Bodø Police Headquarters. The renovation market is growing and is one of Veidekke’s priority areas, both for commercial property and dwellings. Among

600 Veidekke’s major contracts in 1995 were the Manglerudjordet Housing

300

0 1991 1992 1993 1994 1995

Non-residential building Square metres commenced

1,000 sq.m

5,000

4,000

3,000

2,000

1,000 Veidekke has turned the searchlight on procurement and purchasing and signed partnership agreements with several of its largest suppliers in 1995.

0 1985 1987 1989 1991 1993 1995 1997 Cooperative in Oslo and the Midteggen Housing Cooperative in Trondheim, Source: Econ both contracts being worth more than NOK 40 million each.

Residential building In February this year, Veidekke signed an agreement of intention to purchase Number of dwellings commenced Moderne Bygg A/S as part of its strategy to expand the company’s capacity and

35,000 expertise in the field of house-building in the Oslo area. This acquisition will enable Veidekke to undertake more and larger contracts in the field of develop- 25,000 ment, production and sales. A clarification is expected by the end of April. 15,000

5,000 In Germany, activity was concentrated on the building of petrol stations for 1985 1987 1989 1991 1993 1995 1997 Statoil in 1995. A total of 11 stations were completed during the year. Veidekke Source: Econ GmbH showed a turnover of NOK 85 million (NOK 70 million). The operations of Veidekke GmbH will be wound up by the end of 1996.

The prospects for 1996 indicate that volume will remain high in the Building Division. Care will be taken, however, not to build up capacity much more than the acquisition of Moderne Bygg will entail. At the end of the year, orders-on- hand stood at NOK 1,024 million (NOK 1,154 million).

40 Largest ongoing projects

The Amanda Shopping Centre, Haugesund The client is Steen & Strøm Invest AS and local developers. This is a turnkey contract for the building of a shopping centre covering 34,000 square metres of shops, management offices and cafeterias. Work commenced at the end of October 1995 and the Centre will be handed over in February 1997. Estimated total turnover: NOK 230 million.

The Vinterbro Centre, Ås The client is Steen & Strøm Invest AS. This is a turnkey contract for a new shopping centre and car parks totalling 53,000 square metres. The total shopping area covers 28,000 square metres. Work commenced in November 1994 and the Centre was opened on 14 March 1996. Estimated total turnover: NOK 220 million.

Norsk Bransjesenter, Oslo (Norwegian textile and fashion centre) The client is AS Benull, owned by Otas, the Norwegian Trade Fair Foundation and Veidekke. This is a turnkey contract for a building totalling 23,000 square metres, which will accommodate trade fair activities, offices and shops. The contract also covers 10,000 square metres of storerooms and parking space. Work commenced in November 1995 and the building will be ready for occupa- Veidekke has been involved, along with tion in February 1997. Estimated total turnover: NOK 180 million. Vladimir Smirnov and the Norwegian Ministry of Foreign Affairs, in training for young people in Kazakhstan. Smirnov has Manglerudjordet, Oslo visited several of Veidekke’s building sites, where he has emphasised the The client is the Manglerud Housing Cooperative. The contract includes faced importance of combining endeavour and determination with caring and a positive renovation, new balconies and reroofing. Work commenced in June 1995 and attitude. Smirnov is seen here, flanked by will be completed by April 1997. Estimated total turnover: NOK 49 million. apprentices Per Christian Kjeserud and Morten Jørgensen on the building site at the Malakoff School in Moss. Malakoff School, Moss The client is the Østfold County Authorities and the contract includes conversion and extension of Malakoff Upper Secondary School. The work, which is being carried out in cooperation with a Swedish contracting company, Siab, was commenced in August 1995 and will be completed in spring 1997. Estimated total turnover: NOK 46 million.

Midteggen, Trondheim The client is the Midteggen Housing Cooperative in Trondheim. The contract comprises the renovation of twenty-four blocks of flats, replacement of facade panels, window, balconies and doors. Work commenced in April 1995 and will be completed in November 1997. Estimated total turnover: NOK 40 million.

The renovation market is growing, and this is an important area for Veidekke. Carpenter Arne Ronald Hansen is busy replacing the roof on one of the blocks of flats belonging to the Manglerud Housing Cooperative in Oslo.

HEAVY CONSTRUCTION

Extensive improvements The market Looking at the country as a whole, the level of heavy construction activity was and determined efforts high in 1995. The investments in the Gardermoen Airport and its approach roads are the main contributor to this activity. Although road investment fell turned the Heavy slightly last year, the level of activity remains high. There is also a great deal of activity in railway construction, even without the Gardermo line. Power plants Construction Division’s are the field where investment is particularly low compared with the end of the loss into profit in 1995. eighties. Here the level is about a quarter of what it was in 1988.

Orders-on-hand for the Heavy Construction Division developed in a positive direction in 1995. The level of activity remained high, but competition for the individual contracts was fierce. This is due to greater competition from international companies. In the face of this competition, we will have to set strict standards regarding efficient organisation, control and realisation of the projects, if we are to be able to meet the financial requirements we stipulate for the projects.

Judging by the prospects today, 1996 is going to be a record year for heavy construction activities. This means that, in the course of 1996, we will see a weaker trend in incoming orders in this field. However, this decline will start from a high level and is not expected to be very serious. It will primarily be due to less activity around the Gardermo development, while investment in new road construction will, according to the Government’s budget, remain unchanged in 1996 from the year before.

However, it will be very interesting to see how the market for the construction of new and renovation of old power plants is going to develop. The liberalisation of the energy market in Sweden and better opportunities for the exchange of electric power may push electricity prices up. This may mean that some small power plant projects will become profitable and give a boost to this segment of the heavy construction market.

Activities The profit achieved by the Heavy Construction Division showed a substantial

The 95-metre tall control tower at Oslo’s improvement in 1995, turning the loss of NOK 35 million the year before into a new main airport at Gardermoen is being profit of NOK 2.9 million. Turnover amounted to NOK 1,172 million, which is erected by VS-Gruppen (Veidekke and an increase of NOK 221 million on the 1994 figure. NOK 104 million of this Selmer). This tower represents the best of Norwegian architecture and building increase is attributable to the fact that Noremco is now wholly owned by skills. Veidekke. Veidekke’s improvement process “Five in ‘97 - Veidekke towards the On the previous page: Iron fixer Helge Tollaksen. year 2000”, which is linked to the business development programme supported by the Norwegian Federation of Trade Unions and the Confederation of Norwegian Business and Industry, made a large contribution to the rise in profits and to the increase in company loyalty and drive in the Division. NOK million Heavy construction 1995 1994 Turnover 1,172.0 950.9 Major contracts awarded to Veidekke in 1995 included the North Cape Tunnel Operating profit 1.7 -40.1 connecting the island of Magerøya in Finnmark to the mainland, the Arteid Profit before taxation 2.9 -35.0 Shareholders’ equity 123.9 93.9 Bridge - Kverndalen and Gardermoen North - Bekkedalshøgda stretches on the Total assets 468.4 364.0 Gardermo railway line and work for the main airport at Gardermoen and for Gross purchase of property, the Armed Forces at Rena. At the beginning of 1996, contracts were signed with plant and equipment 77.9 23.3

43 Orders-on-hand the Public Roads Administration for the construction of a stretch of road on the NOK mill. E6 highway north of Oslo and with Norsk Hydro for groundwork, concreting 1,000 and structural work on the extension of Potroom C at the Årdal Metal Works.

800 International activities were concentrated around Noremco Construction and Nocon. Noremco was founded in 1981 and is engaged in contracting work in 600 East Africa, mainly in Tanzania and Zambia. Nocon, owned by Veidekke and

400

200

0 1991 1992 1993 1994 1995

Investments in heavy construction 1992 prices

NOK mill. 22,500

20,000

17,500

15,000

12,500 The Heavy Construction Division has a large number of machines that require regular inspec- 10,000 tion and maintenance. Some of this work is done at Veidekke’s main workshop outside Oslo. 1989 1991 1993 1995 1997 Nina Grande is an experienced welder, who works at the workshop. Source: Econ Selmer, is engaged in project work based on spearhead technology in the field of tunnelling and large concreting contracts. Nocon’s largest ongoing contracts are quay construction in Thailand and tunnelling work in Italy. As a member of the Advisory Group of Norway (AGN), along with Norconsult and Selmer, Veidekke offers consultancy services in connection with hydropower development in China.

As already mentioned, the prospects for 1996 indicate a high level of activity in most segments of the heavy construction market, although there is keen competition for tunnelling contracts. This, combined with the fact that Veidekke has gained a stronger competitive position, gives a basis for continued improvements in profits and margins. Orders-on-hand stood at NOK 920 million at the beginning of the year (NOK 577 million).

Largest ongoing projects

Arteid Bridge - Kverndalen, Kløfta This work is being carried out for the Norwegian State Railways. It involves a 10.3 kilometre stretch of the new Gardermo Line and the construction of four bridges and seven culverts, in addition to the actual railway bed. Work commenced in May 1995 and is scheduled for completion in November 1996. Estimated total turnover: NOK 300 million.

44 The North Cape Tunnel, Magerøya The client is the Public Roads Administration, Finnmark. The contract is for a 6.9 kilometre subsea tunnel between the island of Magerøya and the mainland. The tunnel has a cross section of 53.5 square metres. Work was commenced in April 1995, and the completion is scheduled for summer 1997. Estimated total turnover: NOK 200 million.

Garderfjell, Gardermoen The client is Oslo Hovedflyplass AS. The contract is being performed by Veidekke and Selmer in joint venture and includes blasting and crushing of 1.3 million cubic metres of rock for the development of the new main airport for Oslo at Gardermoen. Work commenced in January 1995 and will be completed in December 1997. Estimated total turnover: NOK 129 million.

Susa tunnel, Italy Nocon has signed a tunnel contract in North Italy. The contract is for two full- profile tunnels with at total length of 18 kilometres for a large power plant, ATI, in the Susa Valley. Work will start during the first half of 1996. Construction is estimated to take 30 months. Estimated total turnover: NOK 150 million, of which Veidekke’s share is NOK 75 million.

Rena Military Camp

The client is the Norwegian Defence Construction Service. The contracts involve Veidekke emphasises the importance of earth moving and groundwork for the relocation of the military base at the active involvement of all employees Gardermoen. Work commenced in October 1994 and is due to be completed in at the workplace. Here carpenter Terje Furuli on the right and union representa- December 1996. Estimated total turnover: NOK 130 million. tive John Helge Steinfeld are studying drawings of the Langeland Bridge. This Etterstad, Oslo bridge forms part of the 10.3 kilometre long stretch of the Gardermo Line from The client is the Norwegian State Railways and the contract includes the Arteid Bridge to Kverndalen. groundwork for the tunnel entrance and ramp for the GMB high-speed railway on the new Gardermo Line. This is a stretch of 450 metres and includes a concrete culvert for the double track. Work commenced in October 1995 and will be completed in November 1996. Estimated total turnover: NOK 74 million.

Gardermoen North – Bekkedalshøgda The client is the Norwegian State Railways. The contract covers a 8.1 kilometre stretch of the new railway track between Gardermoen and Eidsvoll. The contract includes earth work and ten concrete structures, four of which are built in order to secure that moose and other game may move about freely in the area. The work is being carried out by Veidekke and Selmer in a joint venture, and will be completed in September 1997. Estimated turnover: NOK 140 million. Veidekke is engaged in heavy construc- Veidekke’s share is NOK 70 million. tion in Norway and abroad and is coope- rating with Swedish contractor Siab on the conversion of the Käppalaverket treat- ment plant in Stockholm. At the construction site very advanced equipment is used. The photograph shows tunnel worker Svein Skarsbø (left) and repairer Geir Johansen on board the plant’s modern semi-computerised drilling rig.

ASPHALT

Veidekke and its subsidi- The market The asphalt market is dominated on the purchasing side by the Public Roads aries are the largest Administration, the local authorities, the Armed Forces and the Civil Aviation producers of asphalt and Authority. The Public Roads Administration is still the largest customer and is responsible for almost half of all the contracts awarded to private contractors in one of the leading produ- this market. Between 80 % and 90 % of the asphalt produced is used to repair the existing road network. cers of crushed stone The level of activity has also remained high for the Asphalt Division. The Public and gravel in Norway. Roads Administration reduced its budgets for asphalt surfacing for 1996, based on the wish for a greater differentiation of road standards and a somewhat lower standard than presumed in the Road Plan. However, there is reason to believe that the demand for asphalt from the local authorities will increase in the course of 1996. Better municipal economy and poor maintenance of municipal roads in the past will mean that the local authorities will give more priority to road maintenance. The demand for asphalt from the private sector will also pick up in 1996. Good earnings and a relatively high level of investment will continue into 1996 and help to boost demand. Generally speaking, it is therefore likely that demand will remain the same as in 1995. The market for crushed stone and gravel also improved in 1995.

Activities The Asphalt Division achieved a turnover for 1995 of NOK 812 million (NOK 687 million), giving a profit of NOK 42.4 million (NOK 35.7 million). These figures include turnover and profit for Veidekke’s subsidiary Korsbrekke og Lorck AS.

The increase in turnover reflects growth in the market, while there was relatively little change in the prices for the different asphalt products. The market was characterised by surplus capacity and sharp competition for the contracts. The improvement in profit derives mainly from more efficient operation, cost reduc- tions and gains on sales.

Asphalt contracts are normally of a relatively short duration. Long-term Veidekke/Korsbrekke og Lorck is the only contracts do occur, however, and for the time being Veidekke has a larger company in Norway with special exper- volume of orders-on-hand than ever before. These orders include asphalt cores tise in laying asphalt cores in rock-fill dams and our technology has attracted a at Svartisen for Statkraft Anlegg, pavement of the east runway at Gardermoen great deal of interest at home and abroad. (with an option for the west runway) and resurfacing of the Sola Airport. Work is in progress at Svartisen for Statkraft Anlegg A/S. Veidekke and its subsidiary Korsbrekke og Lorck AS had a total asphalt produc- Photo on previous page: Foreman Jan Bøie. tion of 1,420,000 tons in 1995 (1,220,000 tons), making them the largest NOK million producer in Norway with a market share of 31 %. The other three main produ- Asphalt 1995 1994 cers are the Public Roads Administration, Nodest Vei and Icopal. Turnover 812.2 686.9 Operating profit 46.3 40.9 Profit before taxation 42.4 35.7 This business segment also includes the production of crushed stone and gravel. Shareholders’ equity 98.0 87.1 Veidekke had an aggregate production of 2.5 million tons from its own quarries Total assets 297.7 306.8 Gross purchase of property, last year, which is slightly higher than the year before. Veidekke and Korsbrekke plant and equipment 84.4 66.6 og Lorck AS together are thus one of the leading producers in Norway.

47 Part of the production volume is used for Veidekke’s own asphalt activities and part is sold to external customers in Norway and on the export markets. In addition to this Veidekke has stone-crushing contracts for the Gardermo line totalling 0.8 million tons, and for the new main airport at Gardermoen in a joint venture with Selmer.

At the beginning of this year, Veidekke purchased the shares in the company Molde Asfalt A/S. This firm sells 10,000-12,000 tons of asphalt annually from its own plant outside Molde. Its turnover for 1995 was just over NOK 7 million. Veidekke’s acquisition of the company was a strategic move to strengthen the Asphalt Division’s market position in the Romsdal region.

In 1995, Veidekke purchased Cemco concrete stone factory at Raudsand. This acquisition is a natural expansion of the Asphalt Division’s production range in the western region of Norway. Concrete stone both supplements and competes with asphalt. The Asphalt Division’s western branch wishes to be seen as a supplier of surfaces for all types of roads and must therefore be in a position to offer several alternatives. Production is highly automated and capacity is 500 square metres per day.

The Veidekke companies carried out asphalt work at a number of Norway’s airports. The runways at Sola and Vigra have been extended, while the work at Røros and Hasvik involved resurfacing. In the field of cold mix technology, Veidekke had contracts for microsurfacing at several airports. This process prolongs the lifetime of the existing asphalt surface and was done at the Leknes, Evenes, Narvik, Berlevåg and Florø airports.

Veidekke is making use of the most There are both environmental and financial advantages in re-using the wearing modern techniques available to lay course on roads. This is a particularly good solution in Norway because of its asphalt at the new airport at Gardermoen. This is the first time specifications from topography and climate. There has been little interest in the market for this type the American research project, Strategic of solution so far, but this is changing now. Veidekke invested in new, more effi- Highway Research Program (SHRP), and thus also completely new, functional cient equipment for re-use in 1995. It has also carried out a number of assign- testing methods, have been used in ments involving milling, stabilising with bitumen, and the use of recovered Europe. asphalt.

Veidekke invested in a new supermobile asphalt plant in 1995. Some of the components of the asphalt plant were manufactured in Norway according to the Asphalt Division’s specifications. The plant incorporates a number of technical and environmental improvements, making it Norway’s most environmentally friendly mobile asphalt plant. Its new design has made it possible, among other things, to reduce fuel consumption by 10 % and to minimise emissions of toxic gases and blue smoke.

The equipment for transporting and laying hot asphalt has been considerably improved in recent years, giving a more uniform asphalt quality and a harder wearing, smoother road surface.

48 Veidekke’s contract for Statkraft Anlegg at Svartisen for the laying of asphalt Asphalt operations 1,000 tons cores in rock-fill dams made good progress in 1995. The Storglomvatn and 1,600 Holmvatn dams are both on schedule. The Storglomvatn dam will be one of the world’s highest rock-fill dams with an asphalt core. This contract is worth NOK 1,200

800

400

0 1991 1992 1993 1994 1995

The Asphalt Market 1995

The Mix Paver does what its name suggests: It mixes and lays asphalt in one and the same operation. This is our most sought-after machine for cold asphalt and re-use of asphalt. ■ Veidekke companies 31 % ■ Franzefoss Asfalt 6 % ■ Icopal 16 % 80 million and the work is being carried out as a joint venture by Veidekke’s ■ Other companies 2 % ■ Asphalt Division and Korsbrekke og Lorck AS. When they are complete, the Public Roads Administration 21 % ■ Nodest Vei 24 % asphalt cores for these two dams will be 125 and 56 metres high respectively. The dam at Storglomvatn will be 825 metres long.

Veidekke/Korsbrekke og Lorck is the only company in Norway with special knowledge of asphalt cores for rock-fill dams and we can offer very competitive prices for this type of work. Our technology has attracted a great deal of interest and the site at Svartisen has received many visitors from Norway and other countries, including China and South Africa, and from ICOLD, the International Committee of Large Dams, which is represented in many parts of the world.

PROPERTY

As a property owner, The market The commercial property market was stable in 1995. There is still a demand for developer and manager, good, suitable premises in central locations. At the same time, there is a lot of newbuilding going on, with the result that the rental level is not improving. Veidekke uses Building costs rose faster than the inflation rate, and it looks as if this will cont- knowledge, capital inue in 1996, although we do not expect an overheating of the market of the kind we experienced at the end of the eighties. The low rate of interest is a posi- and contacts to create tive factor in this context and, all in all, there was virtually no change in conditions for commercial property developers in 1995. growth in assets. In Oslo, there is an increasing tendency to relocate to focal points, which are well located from a traffic point of view. The tenants have a large variety of premises to choose from, and can demand both flexible contracts and tailor- made solutions. The building of a new main airport for Oslo at Gardermoen does not seem to have had much effect so far on companies’ location prefe- rences. The market outside Oslo is still weak. The possibilities of creating projects depend on local knowledge and good local contacts.

The low interest rate has led to an increasing turnover of property. Most prog- noses indicate a steady rise in property values, with the result that a number of investors are now interested in investing in property. We believe this trend will continue throughout 1996.

Activities Veidekke’s property portfolio totalled 90,956 square metres at the end of the year. Rental revenues amounted to NOK 55.8 million, which breaks down into NOK 43 million from external tenants and NOK 12.8 million from internal tenants.

Operating costs totalled NOK 16.8 million, giving a cash flow from property operations of NOK 39.0 million and a profit after depreciation and interest of NOK 5.6 million. Development costs and interest on sites are entered as expenses as they occur and amounted to NOK 6.9 million in 1995. Net sales gains totalled NOK 2.1 million, which gave the Property Division a profit for the year of NOK 0.8 million. Veidekke develops and builds commercial property for sale and can also undertake The total book value of property let to external tenants amounted to NOK the administration, management and maintenance of the properties after they 302.9 million at the end of the year. Property retained for Veidekke’s own use are sold. stood at NOK 86.7 million. At the end of the year, the share of vacant premises

On the previous page: Site Manager Svein was 2 %, in terms of rental value. The average remaining term of external leases Even Dale and Building Supervisor Stein is five years. Leases with a total value of NOK 2 million are due to expire in Udnes from the Oslo Housing Cooperation. 1996. Along with vacant premises, this represents a rental value of NOK 3 million, which will be renegotiated or re-let in 1996.

Skøyen, Oslo Veidekke’s largest development project for its own account is located at Skøyen in Oslo. Veidekke and partners have the option of developing about 75,000

51 External leases square metres spread over five buildings and basement carparks. The Property

NOK mill. Division is playing an active role in project development, marketing and letting, 50 while the Building Division is carrying out the construction work on a turnkey basis. It will also be possible for Veidekke to undertake the management and 40 administration of the completed properties.

30 The first building phase, Norsk Bransjesenter, was initiated in 1995. This building totals 23,000 square metres above ground and will accommodate a consi- 20 derable part of the textile and fashion wholesales in Norway. Veidekke has a 42.5 % share of this project. At the end of 1995, 50 % of rental revenues had 10 already been secured. On the site next to Norsk Bransjesenter, Sjølyst Allé ANS (OTAS/Veidekke) has signed a lease with Scandic Hotel AS for a bed and break- 0 1996 1997 1998 1999 2000 fast hotel plus office premises for Scandic’s head office in Norway. This building has a total of 8,500 square metres plus basement and work is expected to Gross floorage, let to external tenants commence in the first half of 1996.

One of the buildings at Skøyen has been earmarked for a new head office for Veidekke. This building has a total area of 8,500 square metres plus basement and work is scheduled to start in the second half of 1996.

The Skøyen area has aroused interest in the rented property market. We therefore have good prospects of achieving our original objective of continuous deve- ■ Offices, business 59 % lopment and realisation of the projects at Skøyen. ■ Warehouse, industry 25 % ■ Housing, parking areas 16 % Priority areas 1996 Veidekke sold its property at Fornebuveien 11-13, Lysaker, for NOK 68 million NOK mill. Property at the beginning of this year. This sale gave a gain of about NOK 7 million, Rental revenues 55.8 which will be used to write down the book value of other properties. This Property management -12.8 Ground rent etc. -4.0 property was developed and built between 1993 and 1994 and its sale is in Gross property management 39.0 keeping with Veidekke’s strategy and plans for its involvement in property and Depreciation -11.0 Interest -22.4 property development. Veidekke does not wish to accumulate a large property Net property management 5.6 portfolio, but will develop and build for later sale, while offering to undertake Development new projects -6.9 Profit/loss -1.3 the management and maintenance of the properties. Veidekke has secured such Net sales gain 2.1 an agreement for Fornebuveien 11-13. In line with its adopted strategy, Profit for the year 0.8 Veidekke is working on the sale of other properties. Book values (excl. associated companies) It is Veidekke’s express wish to develop and utilise the wide expertise possessed Let to external tenants 302.9 Used by Veidekke 86.7 by the company in the field of property development, building and management. Total 389.6 Thanks to its sound financial standing and good network of contacts, Veidekke

Commercial sites under devl. 37.5 is in a position to take an active part in the development of property in the years Other commercial build. sites 15.3 to come. Housing sites 35.4 Production sites, own use 43.6 Total 131.8

Total fixed assets 521.4

Share of book values in associated companies Let to external tenants 43.8 Commercial sites 31.9 Total 75.7

52 List of properties as at 31 December 1995

% Gross floorage in sq.m. Rental level % Remaining Owner Site Offices/ Wareh./ Parking/ 1996 Own % time Property District ship sq.m. business industry Resident.1) Total Total use vac. of lease2) Schweigaards gate 33B Oslo 100 Leasehold 4,273 516 400 5,189 5,179 0 0 6.3 Fornebuveien 1 - 3 Bærum 50 2,660 2,710 775 803 4,288 5,511 0 0 1.8 Tullins gate 2 Oslo 45 1,124 2,879 195 0 3,074 3,657 0 3 4.2 Fornebuveien 11 - 13 Bærum 100 6,393 4,895 756 3,075 8,726 7,060 0 0 4.4 Gråterudveien 1 Drammen 100 5,327 5,822 0 0 5,822 2,597 0 5 3.5 Gråterudveien 45 Drammen 100 3,664 980 0 70 1,050 451 49 17 2.7 Sande Næringsbygg Sande 100 1,800 1,752 0 0 1,752 1,356 7 9 3.5 Tordenskjolds gate 10 Holmestrand 50 392 1,366 0 0 1,366 1,361 0 0 2.2 Prinsekvartalet Larvik 100 3,588 1,610 0 849 2,459 790 29 21 1.7 Drammen Glass Drammen 50 24,303 814 11,765 180 12,759 2,188 0 14 1.9 Tollbugaten 30 Drammen 100 64 300 0 0 300 80 0 100 0.0 Sande Stasjon Sande 100 600 500 0 0 500 158 0 7 0.9 Ås Teknosenter Tønsberg 100 1,106 267 0 0 267 214 0 0 4.9 Strandtorget Kjøpesenter Lillehammer 9,5 570 962 0 0 962 1,000 0 0 4.0 Fosskvartalet 3) Lier 50 2,399 3,736 289 950 4,975 3,760 0 0 7.4 Larvik Politikammer 3) Larvik 50 1,202 1,756 0 0 1,756 1,671 0 0 18.9 Langbakken 16 Ås 50 1,900 789 0 0 789 431 17 0 2.5 Totlandsveien Bergen 100 6,493 100 618 0 718 160 0 0 0.2 Trøgstad Trøgstad 100 4,360 0 620 0 620 242 0 Iduns gate 2 1) Oslo 100 809 235 0 2,102 2,337 1,250 0 0 10.0 Markveien 28 1) Oslo 100 762 108 0 1,077 1,185 520 0 0 10.0 Østgaards gate 8 1) Oslo 100 308 0 0 541 541 170 0 0 10.0 Total external rental income 69,824 35,854 15,534 10,047 61,435 39,806 2 2 5.0 Ringeriksveien 193 og 201C Bærum 100 37,657 2,698 3,900 0 6,598 5,198 100 Trygve Nilsens vei 8 Oslo 100 Leasehold 1,351 1,290 0 2,641 1,185 90 Haavard Martinsens vei 27 Oslo 100 Leasehold 432 5,263 105 5,800 1,000 80 Glitre Gol 100 2,000 150 375 0 525 180 100 Smedasundet 50 Haugesund 100 5,860 1,032 3,078 0 4,110 1,850 68 Kokstadveien 48B Bergen 100 6,500 934 925 0 1,859 1,100 100 Sognshøy Råde 100 31,041 836 1,088 0 1,924 888 100 Mellomila 24 Trondheim 50 1,028 1,862 0 0 1,862 759 70 Stjørdal Stjørdal 100 7,550 280 690 0 970 336 100 Greåkerveien Sarpsborg 100 6,219 173 0 769 942 337 100 Sandane Gloppen 100 4,429 230 340 0 570 180 100 Moelv Ringsaker 100 11,000 650 1,070 0 1,720 400 100 Total own use 113,284 10,628 18,019 874 29,521 13,413 92 Total 183,108 46,482 33,553 10,921 90,956 53,219 24 2 5.0

Non-residential property under development

Skøyen B0 3) Oslo 42.5 3,543 8,364 1,257 3,366 12,987 Skøyen B1 og B2 Oslo 50 12,750 17,000 17,000 Trygve Nilsens vei 10 Oslo 100 5,500 2,800 1,400 4,200 Fornebuveien 5 - 7 Bærum 50 1,500 1,500 350 950 2,800 Total 23,293 29,664 3,007 4,316 36,987

1) Residential areas 2) Applies to external leases 3) Associated companies

HEALTH, SAFETY AND ENVIRONMENT

The work of improving The work of improving health, safety and environment in the company is a matter of vital importance to Veidekke and is given high priority. This is essential if we are to health, safety and envi- give each individual employee a satisfactory workplace and if we are to achieve Veidekke’s long-range financial targets. Veidekke’s aims regarding health, safety and ronment is given high environment are clearly expressed in the company’s objectives and strategic plan. From and including 1997, the absence rate shall be less than 5 and the injury rate, priority and is clearly i.e. the number of injuries involving absence per million working hours (H), shall be less than 12. defined as a managerial In 1995, Veidekke had an H rate of 19.9 and an absence rate of 5.4. The total responsibility at number of injuries involving absence was 91. Generally speaking, this is poorer than the year before and far from satisfactory, even if these figures are better than the Veidekke. average for the building and construction industry. Only a relatively small number of Veidekke’s more than 400 building and construction sites have reported injuries. There was one project in 1995 that stands out, which involved the construction of Netcom stations. One hundred and sixty-eight stations were built in fifteen months without a single injury involving absence, and for that achievement the project was awarded Veidekke’s Lighthouse Prize for 1995.

In 1995, Veidekke was awarded a health and safety prize by Raytheon Engineers & Construction BV, which is responsible for the planning and building of a desulphurisation plant for Statoil at the Mongstad refinery. Veidekke’s contract for the groundwork and concreting work was completed in a total of 33,600 manhours without a single injury involving absence, making Veidekke the winner of a competition arranged by the client among its subcontractors.

Causes and remedies Some of the reasons for the deterioration in the injury statistics are external factors such as the high level of activity in the market and pressure on completion dates. However, the fundamental problem is that planning and follow-up are not good enough, and this is a question of attitude.

At Veidekke, the responsibility for the development and following up of health and safety work is clearly defined as the responsibility of the line managers. The staff management make sure that routines and documentation are kept up to date in step with changes in objectives and regulations and assist with training and guidance. A number of steps have been taken to improve attitudes, routines, documentation and training.

Health and safety Veidekke’s work environment is the joint responsibility of the health and safety staff and the company’s medical service. Inspection rounds are the most important aid to health, safety and environment (HSE) work at Veidekke’s building and construction sites. In 1995, a total of 3,512 inspection rounds were made in the Building, Heavy Construction and Asphalt Divisions. To help the project managers help themselves, In 1995, Veidekke was awarded the 69 internal revisions were made of HSE documentation and routines. A total of 69 Raytheon Engineers & Construction BV’s injuries not involving absence and 225 near accidents were reported. There were 68 Safety Prize. This company is responsible cases of material damage. for the planning and building of Statoil’s desulphurisation plant at the Mongstad Safety will be given very high priority by Veidekke in the future. Attention will be refinery. Engineer Thorleif Olsen (left) and carpenter Terje Krossøy played a major focused on the use of protective equipment and on following up subcontractors. It is role in the health and safety work at this Veidekke’s experience that sites with good managers achieve equally good results in site. financial figures, quality and HSE. On the previous page: Iron fixer Kjell Furunes.

55 Absence rate - Active sick leave Veidekke’s hourly paid employees As part of the company’s efforts to reduce the overall figures for absence, the medical

% service has initiated a scheme involving active sick leave for long-term absentees, 10 whereby the person in question can try working shorter hours or doing another type of job for up to twelve weeks. The scheme is being run in cooperation with the local 8 social security offices. Rehabilitation committees have been set up in some parts of 6 the company. It is Veidekke’s aim to have this scheme operating throughout the company. In its endeavours to reduce long-term absence, the medical service is giving 4 more attention to the prevention of stress injuries. The medical service staff is there- 2 fore being expanded in order to handle this work and closer cooperation will be established between the medical service and the company’s safety managers. 0 1990 1991 1992 1993 1994 1995 Job satisfaction surveys have been initiated in cooperation with the company’s medical service in the Northern Region and in several of the Asphalt Division’s districts. Using material from these surveys, job satisfaction factors have been Injury rate in Veidekke – analysed and improvement groups have been formed. Through broader participa- Building and Heavy Construction tion, shared responsibility and cooperation, improvements in production will Per million working hours provide financial returns and greater job satisfaction. 24

22 Plan for the Oslo Region Veidekke’s Oslo Region has shown an increase in the injury and absence rates and 20 job satisfaction surveys have therefore been initiated in order to study the statistics 18 and uncover the reasons for absence. The steps that have already been taken in the 16 Oslo Region include:

14 • active use of documentation from completed HSE measures • consistent attitude to deviations 12 1990 1991 1992 1993 1994 1995 • active follow-up of injuries • health interviews with individual employees • full-time health and safety manager • safety manager present at start-up of project

The job satisfaction surveys in the Asphalt Division followed the same pattern. Improvement groups have been formed and will continue their work in 1996.

Training The emphasis on health and safety training was high in 1995 and this will continue in 1996. In 1995, 275 persons completed the 40-hour HSE course for line managers, safety delegates, senior safety delegates, foremen and other personnel who play an important part in HSE work. This course was very well received. Veidekke has budgeted for the same scope of training in 1996. The scaffolding and asbestos handling courses were also well attended. In 1995, 37 persons completed the scaffolding course and 47 took the asbestos handling course.

Environmental accounts Veidekke initiated a diploma assignment at the Norwegian University of Science and Technology in Trondheim. This is the first assignment that has been written on environmental accounting at the University. The purpose of this initiative was to evolve and substantiate a concept for environmental accounting, limited to the outdoor environment, for a building and construction company. It is hoped that this concept can be integrated in the day-to-day operations with a view to achieving continuous improvements in Veidekke’s environmental efforts. It is also important that the company is able to meet the requirements of various authorities and interest groups. The environmental accounts can be raised to Group level by summarising the envi-

56 ronmental accounts for all the projects. The environmental accounting model is an extremely useful guideline for future environmental work at Veidekke.

Examples of clients’ demands The building and construction industry is finding that its largest, professional clients are setting stricter and stricter standards for the protection of the outdoor environment during the planning and realisation of building and construction projects. Veidekke has built up a close cooperation with clients on the environmental aspects of several major projects.

Oslo’s new main airport at Gardermoen Oslo Hovedflyplass AS (OHAS) has laid down stringent requirements regarding the preservation of the outdoor environment in its general contract conditions for the development of Gardermoen. In practice, these conditions mean that the performing contractor has to take a number of special precautions. OHAS has also included a requirement that the injury rate (H) must not exceed 10. VS-Gruppen (Veidekke and Selmer) have been observing this rule with a comfortable margin for a year and a half, but the number of injuries has been rising lately. OHAS has tightened up its standards vis-a-vis its contractors at Gardermoen and is following up the work with reports on near accidents.

The Norwegian State Railways (NSB) Equivalent general environmental standards for dust, vibration, radiation, clean air, clean water, clean soil, protection of permanent ancient relics and landscape qualities, biological diversity, use of resources and other physical and social qualities are laid down in the contractual conditions for the Gardermo Line. In connection with its contract for the stretch of railway from Arteid Bridge to Kverndalen, Veidekke drew up an HSE plan based on the contractual requirements and this was approved by NSB. This client has not set a specific requirement for the injury rate, but Veidekke has specified its own goals. Veidekke has also drawn up a contingency plan in the event of acute pollution of the environment.

Rena Military Camp Conservation of the outdoor environment, environmental control and environmental audits are integrated parts of the work of developing the Rena Camp for the Armed Forces. The quality of the environmental tasks in the projects is safeguarded through directives, specifications and follow-up action from the client at all stages of the development. Veidekke plays a major role in the environmental work. Veidekke is responsible for the building and day-to-day operation of the waste-handling station at the Camp. Here waste that is sorted at source is quantified before being transported to external receiving stations. All the contractors working in the area are required to use the waste-handling station and Veidekke has developed a computerised registration program for all waste as a basis for invoicing the cost of the waste- handling station to the users.

The plan is to recycle at least 65 % of the waste arising from the building work by the end of 1996. In 1995, Veidekke delivered from its own construction sites at Rena 183 cubic metres of wood, 150 cubic metres residual waste, 10 cubic metres of card- board and paper and 3.7 cubic metres of metal. The waste-handling station also includes a covered area for diesel fuelling and changing oil on machines. The covered area also accommodates a tank station for 30,000 litres of diesel and other oil products. Spills of diesel and oil are drained to a closed tank system and the contents of this tank are treated as special waste. The environmental gains of recycling the surplus materials at the Rena Military Camp are estimated to be NOK 7 million.

57 TOTAL CONSUMPTION OF FOSSIL Stone-crushing and concrete-mixing plants have also been set up on the site. FUEL IN TONS 1995 Veidekke is responsible for the distribution and sale of these products to contractors BUILDING DIVISION working in the area and for the operation of the concrete-mixing plant. The presence Diesel/heating oil 400/36 of the stone-crushing and concrete-mixing plants on the site has reduced traffic on Paraffin 4 the approach roads during the construction period by 32,500 trips. The alternative Other oil products 33 would have been to bring in crushed stone and concrete from an external supplier in Elverum. This would have increased the distance covered by heavy trucks by HEAVY CONSTRUCTION DIVISION Diesel/heating oil 3,383/16 735,000 kilometres. Other oil products 356 There was no pollution of significance for the surrounding environment in 1995. ASPHALT DIVISION Spills during fuelling at the waste-handling station are estimated to be 1,100 litres of Energy diesel/oil/oil mixed with water, which are handled as hazardous waste. Diesel/heating oil 9,600 Gas 1,845 Asphalt and the environment Lubricating oil 73 The regulations governing the production of asphalt and the environment are issued Raw material by the Ministry of Environment and by the county authorities. These regulations Bitumen 78,000 govern the emission of dust, emissions to the air, noise and the location of the Amine 191 asphalt plants. Asphalt cleaner 58 White Spirit 5 In 1995, about 1,420,000 tons of asphalt were produced, using 9,600 tons of diesel/heating oil. The consumption of bitumen totalled 78,000 tons. 191 tons of amine, 58 tons of asphalt cleaner and 5 tons of white spirit were used. Asphalt cleaner is now used instead of diesel to clean equipment, while amine is a substance that is added to the asphalt to achieve the necessary adhesion to certain aggregates. The use of trichloroethane in the Asphalt Division’s laboratories has been replaced by merylenedichloride. New regulations are expected to be issued for asphalt production in accordance with proposals that are awaiting consideration in the EU.

In 1995, the Asphalt Division started using the most environmentally friendly mobile asphalt plant in Norway. This plant was partly built to Veidekke’s specifications and it reduces the consumption of fuel by about 10 %. Emissions of gases and blue smoke are largely eliminated. The plant is so designed that up to 50 % of the aggregate used can be recycled material.

In the course of the past ten years, Norway has become a pioneer in Europe in the re-use of the wearing course on roads in the form of cold mix and deep stabilising by milling and the addition of bitumen to existing asphalt on roads that are being improved and repaired. There is a great deal to gain both environmentally and financially by re-using milled asphalt. Re-use is particularly interesting in Norway because of its topography and climate and because we have more kilometres of road per inhabitant to maintain than most other countries in Europe.

Veidekke invested in new, more efficient equipment for re-use in 1995. Veidekke’s Asphalt Division laid around 30,000 tons of recovered asphalt using the cold tech- nique. There was little interest in the market for this type of solution until 1994, but this is now changing. However, demand remains low in relation to environmental and financial gains. Asphalt contractors need clearer signals from their clients regarding the choice of method to enable them to invest in the right production equipment.

Some key figures Veidekke has not drawn up any complete environmental accounts in 1995, but some figures for consumption and production are available. See table above.

58 Organisation

CORPORATE MANAGEMENT

President and CEO Terje R. Venold Building Petter Eiken 1) Heavy Construction Ole Arnfinn Opsahl Asphalt Operations Eigil Flaathen Vidar Aarvold Property Leif E. Johansen Corporate staff Dag Andresen Torkel Backelin

BUILDING HEAVY ASPHALT PROPERTY CONSTRUCTION

Region Oslo Industrial Asphalt Division Property Division Magnar Huse projects/Concrete Vidar Aarvold Leif E. Johansen Eldgrim Ødemotland Region East Korsbrekke Per Johan Plünnecke Underground og Lorck AS Leif Grundt Region South Eigil Flaathen Pål P. Syse Section East Hans Lyshaugen Region West Carl Inge Veland Section Oslo Harald Sangnes Region North Ståle Brovold Section International Ole Arnfinn Opsahl

1) Deputy President/CEO

59 Addresses

HEAD OFFICE REGION SOUTH District Tromsø P.O.Box 3, N-1361 Billingstad Staff centre Rygge P.O.Box 5307, Office address: See Region East N-9024 Tomasjord Olav Brunborgs vei 4, Billingstad Phone: +47 77 68 86 00 District Buskerud Phone: +47 66 98 53 00 Fax: +47 77 68 80 08 Address: Fax: +47 66 98 13 44 Gråterudveien 45, PROPERTY DIVISION HEAVY CONSTRUCTION N-3036 Drammen P.O.Box 3, N-1361 Billingstad DIVISION Phone: +47 32 88 05 90 Office address: P.O.Box 111, N-1314 Skui Fax: +47 32 88 05 07 Olav Brunborgs vei 4, Billingstad Office address: Phone: +47 66 98 53 00 District Vestfold Ringeriksveien 193 B, Vøyenenga Fax: +47 66 84 94 70 P.O.Box 300, N-3101 Tønsberg Phone: +47 67 15 41 00 Office address: ASPHALT DIVISION Fax: +47 67 13 90 89 St. Olavs gate 1, Tønsberg P.O.Box 104, N-1361 Billingstad BUILDING DIVISION Phone: +47 33 30 79 79 Office address: REGION OSLO Fax: +47 33 30 79 77 Olav Brunborgs vei 4, Billingstad P.O.Box 84 Ellingsrudåsen, Phone: +47 66 98 53 00 District Telemark N-1006 Oslo Fax: +47 66 98 06 73 P.O.Box 166, N-3901 Porsgrunn Office address: Office address: KORSBREKKE OG LORCK AS Trygve Nilsens vei 8, Oslo Tollbodgaten 29, Porsgrunn P.O.Box 23, N-1361 Billingstad Phone: +47 22 32 35 50 Phone: +47 35 55 67 00 Office address: Fax: +47 22 32 72 90 Fax: +47 35 55 91 25 Olav Brunborgs vei 4, Billingstad REGION EAST Phone: +47 66 98 57 00 REGION WEST Staff centre Rygge Fax: +47 66 98 24 88 District Bergen P.O.Box 70, N-1580 Rygge P.O.Box 94/95, N-5061 Kokstad A/S NOREMCO CONSTRUCTION Office address: Office address: Head office: Sognshøy Næringspark, Råde Kokstadveien 48 B, Kokstad Kongens gate 9, N-0153 Oslo Phone: +47 69 28 01 37 Phone: +47 55 99 03 00 Phone: +47 22 42 76 66 Fax: +47 69 26 09 15 Fax: +47 55 99 01 20 Fax: +47 22 33 67 48 District S. Akershus District Haugesund Branch office: P.O.Box 55, N-1430 Ås Address: P.O.Box 23287, Oyster Bay Office address: Smedasundet 50, Dar es Salaam, Tanzania Langbakken 16, Ås N-5500 Haugesund Phone: +255 51 67 164 Phone: +47 64 94 11 65 Phone: +47 52 72 95 00 Fax: +255 51 67 676 Fax: +47 64 94 15 62 Fax: +47 52 72 80 14 District Østfold District Sogn og Fjordane P.O.Box 68, N-1720 Greåker P.O.Box 63, N-5801 Sogndal Office address: Office address: Greåkerveien 27, Greåker Kaupanger Industriområde Phone: +47 69 14 50 66 Phone: +47 57 67 82 24 Fax: +47 69 14 55 05 Fax: +47 57 67 86 50 District Indre Østland REGION NORTH P.O.Box 203, N-2391 Moelv P.O.Box 3573, N-7002 Trondheim Office address: Office address: Marisagveien 8, Moelv Mellomila 24, Ilevollen Phone: +47 62 36 89 99 Phone: +47 73 51 00 11 Fax: +47 62 36 90 30 Fax: +47 73 51 00 87 e-mail: [email protected] www.address: http//www.hugin.no/selskaper/veidekke/veidekke_e.html 60 BURSON-MARSTELLER PHOTO: OLE WALTER JACOBSEN, OLE R. PAULSEN PRINTER: BRYNE OFFSET PRINTED ON MATT COATED BVS 250/135G.

Veidekke ASA, P.O. Box 3, N-1361 Billingstad, Norway VEIDEKKEVEIDEKKE ¥ Table of Contents ¥ Overview ¥ Summary 1995 Veidekke aims ¥ Key ﬁgures to be Norway’s ¥ Report of the Board of Directors leading construction Income Statement company, in terms ¥ of expertise and Balance Sheet ¥ financial strength ¥ Cash Flow Analysis ¥ Notes ¥ Shareholders Policy

1995 Annual Report 1995